stock market

Stockmarket in April: best month for UK equities since 1970

April is a good month for investors. In fact, since 1970 it has been the best month for UK equities.

Since that year, the FTSE All-Share index has fallen in April in only nine years. The average return for the index in the month since 1970 is 2.6%, which is significantly higher than the average returns for the following two strongest months (December and January), although it must be said that the volatility of returns is also relatively high in April.

Will this month be another March of changing trends?

Since 1990, the stockmarket has generally seen positive returns in March.

The FTSE All-Share index has had an average monthly return of 0.2% and seen positive returns in 54% of years since 1990. This ranks March seventh among the months of the year for market performance.

However, the record in recent years has not been so strong: since 2000 the average return in March has been 0.1% and (see chart) negative returns have been more common than positive ones for the index.

In nine of the past 10 years UK shares have risen in February

Since 1970, the average return from the FTSE All Share index in February has been 1.5%. The month has seen positive returns in 63% of years.

The chart shows how strong the market has been in February in recent years. Since 2009, it was up every February – until last year, when the index fell by 3.8%.

Can you rely on the ‘January effect’?

Since 1970, the market has seen positive returns in January in 60% of years and has had an average return of 2.1%. From 1984 to 1999, the average FTSE All-Share return in the month was 3.3%; and as can be seen in the accompanying chart, in those 16 years the market only fell twice in January. But after 2000 things changed dramatically.

Here’s why the ‘Santa rally’ is real

Since 1970, the FTSE All-Share index has risen in December in 75% of all years, and the average month return has been 2.2%. This makes it the second-best month of the year for equity returns after April. But it scores even better than April in that it has the lowest volatility of any month in the year.

Remember, remember, November's middling performance is becoming weaker

Since 1990, the FTSE All-Share index has seen an average return of 0.6 per cent in November, with positive returns in 15 of the past 28 years. This ranks it in the middle of the 12 months for equity performance. However, in recent years the market has been noticeably weak in November: the index has only seen positive monthly returns in four of the past 12 years.

Markets in October tend to be strong, if rather volatile

October has a bad reputation. It’s partly justified, one might think, as in 1987 the FTSE All-Share Index fell by 27 per cent in October and in 2008 it fell by 12 per cent in the month.

But the chart below tells a different story. In the 28 years since 1990, the UK stock market has seen negative returns in October in only six years – a record only beaten by December. And in recent years equities have remained strong in October, having fallen in just one year since 2010.