S&P 500 had its best Q1 in 20 years - April 10, 2019

S&P 500 had its best Q1 in 20 years

After a record breaking January and February, the S&P 500 had its best first quarter since 1998. The index had a 13.07% soar since the beginning of the year. This growth wasn’t unexpected for analysts, and according to some, there still may be some upward momentum left in the stock markets.

The S&P 500 had a 13.07% rally in Q1, making this the index’s best first quarter since 1998. Two decades ago the globally important index had a 13.53% soar. Ever since then, no growth like this was seen.

2019 started super strong

On the Indexology blog Louis Bellucci, an associate director at S&P 500 also pointed out the magnificent performance of the index. As he put it: “January’s 7.87% return was the best start to the year since 1987 (13.18%)”. He also mentions that the “hot start cooled some with the 10th-best February since 1987, at 2.97%”.

S&P 500's best Q1 since 1998

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Last month this slowed even further, but prices still rose during March. All this can be perfectly seen on the chart above showing the record-breaking performance of S&P 500 so far this year.

The rally was expected

At the beginning of last year, we expected a market correction (Here’s the correction we’ve been waiting for). It came and pushed prices down. This year we were much more optimistic about trends. We wrote about this at the beginning of January (2019 may be the year of investments), and ever since then things are going well on the American stock markets.

S&P 500's gain since Christmas

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Last Christmas we saw a last selloff on the markets, but things turned around soon. No wonder others were optimistic about this year (Analysts are optimistic about stocks this year). Time proved them (and us) since this year S&P 500 had its best January since 1987 and S&P 500 had its best kick-off in 30 years. After March, we also see that this was the best Q1 since 1998.

What to expect later in 2019?

Analysts expected a turnaround on the markets this year because the economy of the United States is relatively healthy. In 2018 nothing extraordinary happened but prices still fell. So, a rally was due this year. This momentum can go on a bit further and if Joseph Zidle is right, S&P 500 still has some fuel to go higher this year. Historically speaking, March and April are also strong months for the index, so the rise may go on.

Still, momentum slows already, and some movements can happen on the markets. Fed’s rate decisions and the USA’s relationship with China can matter a lot for example. May also often brings sell-offs. This doesn’t mean that stocks won’t perform good in the future: presidential elections are coming in the US which often boosts stocks. But it means that diversification (Diversification? Not magic, but a good idea!) and discipline (The importance of discipline explained) might become more important. It’s also a good idea to look at different instruments to invest in. Gold might be a great choice, since money was poured into it last year.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.