Historic Rally Runs Up Against September – September 2, 2020
Since bottoming on March 23, the S&P 500 Index2 is up a stellar 56% through August 31 (St. Louis Federal Reserve).
- August’s run was the best August since the mid-1980s (St. Louis Fed).
September is here. That means cooler temperatures, a change in the season, and the worst month for the stock market, per long-term averages (St. Louis Fed).
- That’s right, it’s September and not October. October’s reputation comes from the 1929 and 1987 market crashes, and a market swoon in 2008.
Election year jitters
Since 1950, September and October have a negative return during election years, with October standing out as the worst month of the year.
- During election years, September averages a 0.2% decline and October averages a 0.7% decline.
- However, November and December average increases of 1.5% and 1.2%, respectively.
Source: LPL Research, Past performance is no guarantee of future results.
Could we see the pattern play out again? Maybe, but this year has been unlike any other year.
Investor’s corner
While low interest rates are typically supportive of higher stock prices, valuations are at lofty levels following the historic stock market rally.
It leaves the market vulnerable to the unexpected. Yet, attempting to time peaks and valleys is exceedingly difficult, if not impossible.
A well-diversified portfolio tailored to your individual goals reduces volatility tied to today’s environment and can help place you on the road to your long-term financial goals.
Created 2020-09-02 16:06:50