U.S. Stock Market Ends Up for the Month of March
Are the bulls ready to take charge?
It certainly looks like it. The Dow has had its best month since 2002, posting a dramatic monthly gain for the month of March. The Dow is up 8% for March, and the Nasdaq did even better with 11% gains. However, those gains were not enough to erase a loss over the course of the first quarter of 2009. But more good news could be on the way if optimism manages to turn the month’s modest gains into a true stock market rally.
Buying now, before things really heat up on the stock market
For the bulls, now is a great time to buy. The stock market is up just enough to lend some confidence to investors, but it is still low enough that there are some super bargains to have. Indeed, there are plenty of value stocks at great prices, and one can get in on index funds while they are still cheap. And that is the fundamental investing strategy for buy and hold investors: Get things while they are at low prices, and then hold them for years and watch your portfolio grow.
Another reason that the stock market is rallying right now is to do with the fact that mutual funds are stocking up on March’s winners. MarketWatch reports on this strategy by mutual fund managers:
Portfolio managers often engage in “window dressing,” or buying stocks that make quarter-end statements look good late in a quarter.
“A lot of people were scared to do anything early in the quarter, and then they were looking at their portfolios and thinking, ‘Wait, the market’s gone up,’” said William Lefkowitz, chief derivatives strategist at vFinance Investments.
No matter the reason for the stock market rally, though, it is nice to see the bulls starting to come out. Now, the real test is whether or not the bulls can hold off a return of the bears.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
