Friday, September 3, 2010

September: The Cruelest Month?

September has historically been the weakest month for the stock market, with the S&P 500 losing an average of 0.6 percent per year in September since they started tracking this back in 1950. Only two other months have losing records over that time, February and June. Four times in the past decade, the S&P 500 has lost at least 5 percent of its value in September.

There are various theories put forth as to why this should be so. People roll up their sleeves and get back to work after Labor Day, whether that's fund managers taking profits on their winners or individual investors paying attention to their portfolios once again and trying to get them in order. More recently, bad news has tended to fall in September for no real reason: September 11 ruined the month in 2001 for a lot of reasons, and the crux of the banking meltdown happened in September 2008.

But it's a tendency, not a hard-and-fast-rule. Last September, for example, the S&P 500 gained 4 percent. As they say, past performance is no guarantee of future results. So here's hoping we have a September 2010 that bucks the trend.

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