The stockmarket in April

April is one of the most exciting months for investors. Five years ago it was the strongest month for the stockmarket, but it now ranks second behind December. The two months have been switching first and second places for quite a few years now.

Interestingly, this characteristic is not unique to the UK market: a study of 70 markets worldwide found that the strongest months for shares were (in descending order) December, January and April.

On average the market rises 1.8% in April, and the probability of a positive return is 71%. Since 2003 the market has only fallen three times in April, although this doesn't match earlier performance: from 1971 the market rose in April every year for 15 years - a recent record for any month.

The market often gets off to a strong start in the month - the first trading day of April is the second-strongest first trading day of all months in the year. The market then tends to be fairly flat for the middle two weeks and rises strongly in the final week.

This is the strongest month for the FTSE 100 relative to the S&P 500 (in sterling terms); the former outperforms the latter by an average of 1.3 percentage points in April (in 2015 the FTSE 100 outperformed the US index by 5.1 percentage points).

April also often sees strong performances by sterling against the dollar and oil.

April is the last month in the strong part of the six-month cycle (November-April) that is a feature of the Sell in May effect. Investors may therefore be reducing their exposure to equities ahead of May.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.