September Historically a Slow Month for US Stocks, But Investors Advised to Ignore Seasonal Swings
The S&P 500 has historically averaged a decline of approximately 0.6% in September, making it the only calendar month with a negative historical average. This "September Effect" is attributed to factors such as money managers rebalancing portfolios after summer breaks, the Federal Reserve's mid-September interest rate decision, and media coverage influencing preemptive selling. However, analysts suggest long-term investors should not be concerned by these seasonal dips, as attempting to time the market based on such trends often reduces long-term returns and increases taxes. Instead, investors are encouraged to view potential market downturns in September as opportunities to buy stocks at lower prices.
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