September Tidbits
Why is September known to be such a disappointing month for bullish investors? Presumably, it has to do with portfolio managers looking to "clean house" on the other side of Labor Day, cognizant that year-end statements will look better if they don't include big losers and that a typically bullish six-month period for the market (Nov. 1-Apr. 30) is just around the corner.
Over the course of the past 53 years, the indispensable Stock Trader's Almanac shows that the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite have suffered average declines of 0.7%, 1.1%, and 1.1%, respectively. In the last 32 years, however, the average September losses for the S&P, Dow, and Nasdaq have been 1.3%, 1.6%, and 1.1%.
There are no guarantees, of course, that the market will suffer similar declines this September. Remember, some positive Septembers since 1950 also factored into the calculation of the aforementioned averages. Moreover, you may be interested to know that the Stock Trader's Almanac also indicates that there have been only 3 losses in the last 10 election year Septembers.
With an eye on vacation next week, then, I'll leave you with some other September tidbits, courtesy of the Stock Trader's Almanac, to ponder in the week ahead.
1. September opened strong in 7 of the last 8 years; however, September tends to close weak due to end-of-quarter portfolio restructuring by fund managers.
2. The Dow has been up the day after Labor Day in 7 of the last 9 years.
3. The Dow has been up 9 of the last 13 years on the Monday before a triple-witching options expiration, but has been down 8 of the last 13 years on the triple-witching Friday (with the introduction of single stock futures, you may now hear this referred to as a quadruple-witching options expiration).
Those sector indexes entering seasonality periods in September include the Pharmaceutical Index (DRG; Sept-Jan; seasonality bullish) and the Semiconductor Index (SOX; Sept-Sept; seasonality bearish) |
