INVESTING WITH CLARITY® BLOG

Ides of March

April 6, 2021 12:24:28 AM

REFLECTIONS ON THE ROMAN CALENDAR – As we transition our thoughts as expressed above in the lead article regarding our V.A.L.U.E. Theme for the year 2021, we take a very intriguing look at the Roman calendar.

According to Wikipedia at https://en.wikipedia.org/wiki/Ides_of_March the "Ides of March” (pronounced “aIdz”) is the 74th day in the Roman calendar, corresponding to March 15th. This important day on the calendar was marked by several religious observances and was notable for the Romans as a deadline for settling debts. In 44 BC, it became notorious as the date of the assassination of Julius Caesar which made the Ides of March a turning point in Roman history.”


Before anyone transitions to the next article and wonders if we have completely lost our minds, let us explain the connection between the Ides of March and returns on stocks. According to the great research folks at Bespoke, the date of March 15th has been quite an important date as to how one gauges the remainder of the year as far as stock prices are concerned.


RESEARCH FROM BESPOKE – unearthed the following connection between the two:

  • The S&P 500 based on ticker IVV is up +6.03% through March 15th.
  • YTD returns up to the "Ides of March” date of March 15th when they have fallen between +5-10% have been a very good indicator of the rest of the year.
  • Going back 65 years to 1956, there have been 16 years in which the S&P 500 has been up between 5-10% YTD through March 15th.
  • The index has only traded lower for the rest of the year once, and that was in 1956.
  • For the remaining 15 times, the S&P 500 has averaged a gain of 14.77% for the rest of the year when it has been up between 5-10% YTD through March 15th.
  • If we pivot to the “Modern Era” of investing since 1990, there have been four years that have seen the S&P gain between 5-10% through March 15th.
  • The years have been 1995, 1997, 1999 and 2017. The rest-of-year returns in each of these years ranged from +12.09% in 2017 to +25.22% in 1995.

So what does this mean for investors? Well for starters, it certainly doesn’t guarantee anything. However, like other historical references, it provides us with perspective on past patterns that seem to have repeated themselves over the longer term. Will the “Ides of March” relationship between pre and post-March 15th performance of the S&P 500 work for the year 2021? Only time will tell of course, but you have to admit, for history buffs it is a pretty neat connection, wouldn’t you say?


Chuck Etzweiler

Chuck Etzweiler

MBA, CIMA®, CFP®, CMT, Chief Research Officer & Senior Vice President

With more than three decades of investment industry experience, Chuck directs the on-going research efforts of the firm, much of which help both advisors and clients understand the philosophy and strategy of Nepsis, Inc. in a deeper manner. A high percentage of the focus of the research is centered around money manager pitfalls, investor short-comings and repetitive behavioral biases that detract clients from earning optimal returns.

Prior to joining Nepsis, Chuck worked as Chief Market Strategist for True North Global Research and as an Investment Analyst with both Wells Fargo and the Bank of Hawaii. Additionally, Chuck has earned the CIMA® designation and is a Chartered Market Technician. Chuck is a graduate of Syracuse University and also has earned his MBA in Finance from the Crummer School of Management in Winter Park, FL.

Chuck is an active member of the Market Technician’s Association and the Investments & Wealth Institute.

Chuck was raised in Allentown, PA and now lives in San Diego, California with his wife and two adult sons.

Email: cetzweiler@investwithclarity.com

 

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