What is the historical impact of tax return liquidity on the S&P 500?

Historically, this liquidity injection acts as a 'buy' signal, with the S&P 500 averaging a 13% gain over the subsequent six months.

When do equity ETFs and mutual funds typically see strong inflows?

March and April are typically strong months for inflows into equity exchange-traded funds and mutual funds.

Home / Business and Economy / Tax Refunds Inject $150B into Stocks

Tax Refunds Inject $150B into Stocks

18 Feb

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Summary

Tax returns will add $150 billion to the stock market by end of March.
S&P 500 historically rises 13% over six months after this signal.
March and April see strong inflows into equity ETFs and mutual funds.

An estimated $150 billion in liquidity is expected to flow into the stock market by the end of March, driven by tax returns. This annual event, which sees about 64% of returns issued, historically acts as a significant 'buy' signal.

Analysts observe that the S&P 500 has a perfect track record of rising after this liquidity injection, averaging a 13% gain over the following six months.

Furthermore, March and April are typically strong months for both personal savings rates and inflows into equity exchange-traded funds and mutual funds, reinforcing the positive market outlook.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.