After February's Plunge, Will March See a Rebound?

The last trading day of February has ended, with the S&P 500 (SPX) closing at 5,954.5, marking a 1.24% decline for the month. This downturn reflects a broader market correction after a strong rally in previous months.

S&P 500 (.SPX)

However, historical data suggests that March could bring a reversal, as it often follows a seasonal pattern known as the "March Effect." This period is typically associated with the end of the financial year and fresh investment inflows, which could drive stocks higher.

Market Outlook: Signs of a Potential Rebound?

Despite the February decline, there are early signs that a rebound could be on the horizon. Last Friday, big tech stocks staged a strong recovery, which extended into overnight trading. If this momentum continues, it could lift broader market sentiment and potentially spark a rally in March. However, factors such as economic data, Federal Reserve policy signals, and geopolitical risks will play a key role in shaping market direction.

Portfolio Performance: A Bright Spot in Bonds

While February was a rough month for equities, my portfolio ended the month in the green, largely thanks to TLT (iShares 20+ Year Treasury Bond ETF)—my biggest holding. TLT performed well in February, likely because investors sought safer alternatives as market fears grew. Treasury bonds are often seen as a safe-haven asset, benefiting during periods of uncertainty. Additionally, TLT provides regular dividends, adding to its appeal in volatile times.

iShares 20+ Year Treasury Bond ETF (TLT)

March Strategy: Stocks to Watch and Key Earnings Reports

Looking ahead to March, I’m hoping for a market rebound, particularly because I hold positions in OXY (Occidental Petroleum) and RC (Ready Capital). One key catalyst will be RC’s pre-market earnings release—if results are strong, it could provide a boost.

Ready Capital Corp (RC)

Occidental (OXY)

In addition to monitoring existing holdings, I’ll continue searching for undervalued stocks that could offer strong upside potential. Market volatility often presents opportunities to buy quality companies at attractive prices, and I plan to take advantage of any such setups.

Final Thoughts: Cautious Optimism for March

While February’s plunge was steep, history suggests that March could be a turning point. If investor sentiment improves and economic data supports a stable outlook, we could see a rebound. However, I’ll remain cautious and continue managing risk while looking for potential buying opportunities.