Spooked by September?

Jim_SamsonWe entered September on a bittersweet note: S+P 500 hit 2,000 as an all-time high, but it didn’t advance further, perhaps because people have gotten ‘spooked by September’.

Should YOU be…? September is supposed to be the most volatile month of all, and I recently heard that some experts say that September often wipes out all the gains for the year!

Last week I ranted about a couple of Wall Street’s nonsensical axioms; so-called pearls of wisdom that are evidently nothing more than urban legends. Let’s see if this is another one…

Here’s a chart of the S+P 500 over the last 3 years (blue line is the average price):

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Results are as follows for last 3 years:

2011:

Started September at 1,154, ended at 1,131. Down 23 points.

2012:

Started September at 1,465, ended at 1,440. Down 25 points.

2013:

Started September at 1,655, ended at 1,690. Up 35 points.

Average result for last 3 Septembers: Down 4 points.

Notice how 2011 was a bad market, and how even 2012 to an extent wasn’t a defined bull market. But 2013 was a bull market for sure, like now, and the result was a GAIN in September.

And I don’t see much evidence of “all the gains of the whole year being wiped out”! In a bear market, maybe, but this ain’t no bear market. Who knows what happens this September, but the justification of being spooked by September is non-existent in a bull market.

The author has an interest in the securities discussed in this article. Source of charts: stockcharts.com

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