September’s Stock SuperstitutionsÂ
There are 26 days left of September, and investors are counting each and every one of ’em! It’s traditionally a cursed month for the stock market, but for every ten losers, a winner is hiding somewhere!
According to data stretching back thirty years, if the Dow Jones were only open in September, we’d all be broke. It’s lost 0.75% during the month on aggregate, and with the trade war simmering and recession signals firing, investors fear that markets aren’t about to break tradition. Unless stock pickers are prepared to rewrite history, expect most of the blood to be spilled in the materials sector.
However, for all the doom and gloom, it’s not all bad news for speculators. Your safe haven will be in anything that rivals stocks. Bonds and gold are usually spared their gains in September, and there are even some healthcare and telecoms companies out there that could make it out alive. Oddly, the September slump isn’t the only supernatural market phenomenon that investors scribble onto their calendars!
The ‘January Effect’ has long been a favorite market tip-off, with the first month of the new year often hosting rallies. Some theorize that after a Santa Claus run-up in December, investors come up for air and cash in on their yearly gains. Then in January, they re-enter the fold to commence a new year in the markets. Over the years, more interesting rumors have swirled around gains made on Fridays!
Omens aside, though, investors are buying the future when they buy a stock, not the past. At the end of the day, fantasies and falsehoods from old market folklore mean nothing over the long-term, which only a fundamental analysis can try to predict. Can’t resist feeling superstitious? See you in gold, then!
