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September – the worst month for stocks
October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February.
-Mark Twain
September 1st is a very strange day for me. In Russia the school year across the whole country started on September 1st. I vividly remember myself as a child on that day throughout my childhood. The sun always shined brighter that day, the cleanliness of my uniform was at the year’s high, it was custom to bring flowers to teachers on that day thus the school smelled like a botanic garden. Every year I promised myself that I’d be more serious, to smile less and make fewer jokes. Teachers did not like my smile or my jokes, always called me a class clown. Every year I failed at these goals. Thank God!
This introduction has absolutely nothing to do with what I am about to discuss except that today is September 1st, the beginning of September and historically has been the worst month of the year for investors. After I looked at the data from 1900 to 2008, it is safe to conclude that September historically was the worst month for investors, period. Stocks average and median returns were -1.16% and -0.56%, respectively. Far worse than any other months. In fact with the exception of June where median returns were down 3 basis points, no other month of the year had negative median returns than September. In 63 out of 108 years September brought negative returns to investors, greater than any other month.
It gets worse, when returns in August were greater than 2% average and median returns in September were -2.29% and -1.44%, respectively. I’ll be honest I have no idea why this happened or what this September has in store for us. Maybe investors don’t like the end of summer and the first months of fall. Maybe if some of your stocks a hovering close to fair value you sell now? Or maybe if you were looking to buy a stock you wait a little?
Vitaliy N. Katsenelson, CFA, is a portfolio manager/director of research at Investment Management Associates in Denver, Colo. He is the author of "Active Value Investing: Making Money in Range-Bound Markets" (Wiley 2007). To receive Vitaliy's future articles my email, click here.
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A good quote from Mark Twain on Brokers:
"Mind, I do not say that a broker will be saved, or even that is uncommon likely that such a thing will happen - I only say that Lazarus was raised from the dead, the five thousand were fed with twelve loaves of bread, the water was turned into wine, the Israelites crossed the Red Sea dry-shod, and a broker can be saved."
Feel free to replace broker with GS employee.....
The likes of GS are playing god in the market; you would be fooled no matter what you do.
Not anymore when there are likes of GS who seems to have advanced knowledge of everyones else's cards to game the markets all the time.
USD is still bullish.
VIX index is now bullish too.
More info at link.
http://www.zerohedge.com/forum/market-outlook
The stock market has nothing to do with valuations, P/E ratios, book value, supply/demand, & is only roughly correlated with the economic cycle. The market is run on trading positions, short squeezes, and manipulations up or down for economic benefit. It has always been run this way. You can run it up on light volume, move it around at will on any month, and if you have the deep pockets of the FED operating thru their bank "operators" (GS, JPM) you can pin prices to any support or resistance level when required. Go back and look at the charts from the 1920's on up, it never changes. The game goes on...
Not so sure about your police work there, Lou. To a trader who is paid monthly, fundamentals mean nothing. The data only comes out quarterly. On top of that, not everyone considers the same information to mean the same thing; this goes for technicals as well.
I have worked on too many trading desks where someone has thrown up there arms and said "fundamentals dont work!!" or "It was just some momo trading desk that made the stock go up!!" Trading is gambling, and there are no absolutes in either, just probabilities.
The worst part is when someone complains about fundamentals, and all they use is a P/E or some simplistic, easily manipulated formula like that and dont bother to understand the concept of adjustments. If you are going to criticize something for not working, it helps to read the instructions first....
looks like the September sell indicator is doing what it's supposed to
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Superstition...
Why not follow the stars, tea leaves, or cat guts?
How many back-to-back down Septembers?
I'm always weary of the market going where no market has been before. A powerful rally through next year would shock me, expectations and all.
"You better hope so Leo or our pensions are really down the toilet."
Yup, they missed the rally and are loading up again to try to make up for lost ground. Someof them were dumb enough to actutally short stocks from March onwards and got their hands handed to them. OUCH!
You better hope so Leo or our pensions are really down the toilet.
A normal bad September could turn out to be the straw that breaks the camel's back.
Ain't it ironic how the market dives ever since the economic numbers started to show improvement but the market rallied when doom & gloom were about everywhere?
Traders have been selling into the rally. Insiders are mostly out. Insider buying was at al time levels in August. No confidence in their own stock, probably not in any other stock either. Markets up on fumes and tricks. The magic show is becoming more obvious.
Just about nobody I talk to expects a major crash or stock dump this time, at least not until 2010.
Fool me once, shame on me.
Fool me twice..
Short, short, short for the next two months at least.
actually it seems that *everybody* is expecting a major pullback. and as so many are expecting a serious pullback, don't be too surprised if it doesn't.
A correction is over due is the common argument that's already prepacked on the shelves. A brutal crash and retest of March lows would be mostly unanticipated and "inexplicable" unless you've been paying close attention and not a fool to delude yourselves.
There is no growth other than government priming the pump which is coming to an end. The private sector is neither expanding nor investing.
Unless we get QE 2.0 I'd call August 2009 the top for the next 3 years.
all the insiders are out and all the outsiders are in.
it goes up when the insiders are in and the outsiders out.
Obium supplies running out ?
Maybe some Bushweed might be in order now..
Keep buying the dips folks, she will head right back up.
Leo
Maybe it is because symbolically fall represents the decent into death (winter), much as the four seasons mirror a human life...
Very deep. Way to deep for human traders, and according to the SkyNet release schedule, life-death-resurrection mythology support will not arrive until the April 2010 service pack (as part of the human archetypal symbolism recognition and synthesis sub-system).
On the other hand, I'm not so sure there will be a re-birth come Spring time. April could truly be the cruelest month.
I suppose our puppet masters will engineer a "typical September" to make everything look kosher but I wouldn't look for too much turmoil/downside. Obama was touting a few minutes ago as the lead-in to his swine flu statement, talking about how things are recovering, back from the brink, blah blah so if Obama is touting I would think all processors are on deck ready to run over a fresh deck of emboldened shorts.
If it's not broken, don't fix it.
Presuming that 'investors' means those in the market for more than one month, September declines are meaningless.
In fact, a true investor, knowing September which usually sells off a bit, is a typically great time to pick up what he invests in at a knock off price.
Beauty is in the wallet of the beholder.
an investor antiticaptes
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
A 'true' investor is in cash right now or just an idiot.
..and there's that.
It used to be a large money supply/demand cycle when 20 percent of the economy was tied to agriculture. You had an economy flushed with agricultural cash borrowing to stock up for back to school and christmas.
If September is worst month, what is October as the crash month?
I think Mark Twain would've been a cool guy to hang out with. You too Vitaliy, but only in the Brighton Beach area -Denver a bit too far.
I loved his quote something like.
'history doesn't repeat itself,but it sure does rhyme'