September Tends To Be Bad For Stocks. Here’s How This One Is Shaping Up.

Russell Burns

3 months ago4:14 mins

September Tends To Be Bad For Stocks. Here’s How This One Is Shaping Up.

If the S&P 500 has a favorite month, September’s probably not it: the index has historically struggled this time of year. It’s what’s come to be known in the market as the “September Effect”. And, judging from a couple of technical indicators, this year’s effect is likely to be a tough one. We’re getting close to the ninth month now, so let’s take a look at what it might mean for markets, and how you might prepare for a difficult month…

What is the September Effect?

Just look at the S&P 500’s average monthly performance since January of 1928: in the month of September, it saw its steepest average decline, falling 1%. Only two other months saw declines – February and May – and their slides were tiny by comparison, at just 0.1%. The rest of the months, on average, saw gains.

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