The Best First Quarter In 15 Years

Tyler-MathisenFor stock investors, the first quarter of 2013 was one of the best in years – 15 years, to be precise. Not since 1998 has the Dow Jones Industrial Average posted as stellar a first quarter as it did this year.

So what happens next? It’s anybody’s guess, of course, and there are lots of risks out there – from Europe’s ongoing debt woes to threats from North Korea and Iran.

But it’s always interesting at times like this to look at history. There have been 12 other instances since 1950 when the Dow was up more than eight percent in a year’s first quarter. On eight of those occasions, the Dow ended the second quarter with a gain of at least one percent. There were, in fact, five times when the Dow rose more than four percent in the second quarter after an eight percent-plus first quarter.

Last year wasn’t one of them, though. In 2012, the Dow gained eight percent in the first quarter, but then lost 2.5% in the second.

On the other hand, here’s some comforting news. On the 12 occasions when the Dow posted a first-quarter gain of eight percent or more, the index has always finished the year in positive territory.

And here’s another historical note – or quirk. Since 1950, April has been the Dow’s best month of the year, averaging two percent monthly gains.

Tonight on NBR, we’ll look ahead to the second quarter for stocks and discuss whether a currently popular investment strategy can continue to deliver many happy returns. I hope you will join Susie and me.

-Tyler Mathisen

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