Why September Is a Brutal Month for Markets: Insights into the Stock Market's Challenges
September's Stock Market History
The month of September is notorious among investors, as data shows it has historically been the worst month for the S&P 500. According to data spanning back to 1928, this month is associated with significant stock underperformance.
Understanding the Trends
- The S&P 500 has recorded losses in 55% of September months over the past century.
- Recent trends indicate that the index has dropped for four consecutive years in September.
Higher trading volumes contribute to market volatility following the Labor Day holiday, marking a return from the summer lull. With more traders actively engaging in markets, the potential for larger price swings increases.
Volume Dynamics
- Average monthly trading volume during the summer (June to August) rests at 15.2 billion shares.
- In September, this figure spikes to 17.2 billion shares as activity resumes.
Understanding these dynamics is crucial for investors looking to manage risk and navigate September's uncertainties effectively. Analysts, including SoFi's Liz Young Thomas, emphasize the need for caution in investment strategies during this historically challenging time.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.