DJIA Up 1.44% in April Since 1929

The earthquake in Japan. Libya. Egypt.

The markets have had to digest a great deal of unsettling and horrific news so far in 2011, yet they still keep trucking higher on a near daily basis.

The Dow Jones Industrial Average, which started the year at 11,577.51, is now sitting at 12,220.59, which equates to a gain of approximately 5.5%. The NASDAQ is up 3.4% since the start of the year, while the S+P 500 is up roughly 4.4%.

Are the markets due for a pullback? Is history is any indication, no.

Historically speaking, April has been one of the very best months of the year for the markets.

Since 1929, the Dow Jones Industrial Average has averaged a return of 1.44% in April.

Since 1971, the NASDAQ has averaged a return of 1.53% in April.

Since 1950, the S+P 500 has averaged a return of 1.51% in April.

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Let's look at the top three months historically for each of the three major indexes to give you some perspective:

DJIA (since 1929)

July, +1.5%
December, +1.46%
April, +1.44%

NASDAQ (since 1971)

January, +2.66%
December, +2.1%
April, +1.53%

S+P 500 (since 1955)

December, +1.73%
November, +1.56%
April, +1.51%

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The top two best single month performances (in points) in the history of the Dow Jones Industrial Average occurred in the month of April (1999, +1,002.88 points and 2001, +856.19 points).

In addition, the second best single month performance (in terms of % gain) in the history of the DJIA occurred in April of 1933 (+31.95%).

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I think that many people assume that April is usually a bad month for the markets because of what happened to the NASDAQ in 2000. Practically everyone was glued to the markets back then (thanks to the dot-com boom), and they all watched as the NASDAQ imploded that month. In one particularly bad week, the NASDAQ lost a mind-boggling 25.3% of its value (week of April 10th, 2000).

The fact is, April is usually a fairly strong month for the markets.

Filed under: General Knowledge