S&P 500's April Rally Edge Fails Statistical Test
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- S&P 500 has gained 1.3% on average in April over the past century — nearly double the 0.7% all-month average — with July posting significantly better returns than any other month
- April's first-half advantage is not statistically significant at the 95% confidence level, undermining the common belief that early April reliably delivers outsize gains
- Newsletter editors point to the Federal Reserve's desire to keep liquidity stable during tax season and pre-April 15 IRA contributions as drivers of early-April strength, but Hulbert finds the data does not support these theories
- Jeffrey Hirsch of the Stock Trader's Almanac and the Almanac Investor Newsletter recommends jumping the sell-in-May gun — he exited stocks on April 3 last year, nearly a month ahead of the conventional sell date
- Hulbert's bottom line: investors may want to stay invested or even add to holdings, but not because of the calendar — given year-to-year volatility in monthly returns, April's supposed edge is too unreliable to bet on
Why it matters: Retail investors who chase April's historical 1.3% average gain are chasing a statistical illusion — at the 95% confidence level, the roughly 0.6 percentage-point premium April has shown over the 0.7% long-run monthly average doesn't clear the bar for a genuine pattern. That means anyone rebalancing into equities in April on calendar logic alone is making a bet the data can't validate.
