September Gloom - September 11, 2019

October has a gloomy reputation.

  • The 1929 market crash and the 1987 market crash were in October.
  • During the 2008 financial crisis, stocks were badly beaten up in the month that sports Halloween.

Yet, since 1970, the worst performing month for the S&P 500 Index2 has been September, per St. Louis Federal Reserve data.

Investor’s corner

The good news—through September 9, the S&P 500 Index is up 1.1% for the month (MarketWatch data).

  • Cautiously favorable trade headlines and stability in bond yields have supported sentiment.
  • The economic data have yet to suggest growth is stalling.

August has also been a historically lackluster month, and last month’s return was no exception.

While past performance is no guarantee of future performance, the last 15 times stocks declined in August, the rest of the year was higher every time, according to LPL Research.

That said, successful long-term investors look past weekly and monthly market gyrations. They recognize that broad market indexes don’t move up in a straight line but have a long-term upward bias.