September Is a Bad Month for the Stock Market. Why Gold Is a Different Story.

  • 📰 MarketWatch
  • ⏱ Reading Time:
  • 59 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 97%

Ireland News News

Ireland Ireland Latest News,Ireland Ireland Headlines

I insisted for years that a seasonal pattern doesn’t exist for stocks. A recent study has changed my mind.

September is famous on Wall Street for strong seasonal cross currents. Some of them may even enjoy strong enough statistical and theoretical support to justify betting on them.

The Dow has been around for a lot longer than the period since 1975, of course, and September has been the worst average performer over that longer history as well. Since the benchmark was created in 1896, September has produced an average loss of 1.1%, versus a 0.8% average gain across all other months. September’s dismal relative performance has been remarkably consistent, furthermore: Its return rank relative to the other 11 months is below average in every decade since 1900 but one.

Why Stocks May Do Poorly in September Regardless of the strength of the statistical case in favor of a seasonal pattern, you shouldn’t bet on its persistence unless a plausible theoretical case can be made for why it should exist in the first place. The authors of this recent study connected these monthly SAD changes with the stock market by measuring flows of cash into and out of equity mutual funds. After controlling for other possible factors that could potentially also explain those flows, the researchers found a high correlation between changes in the incidence of SAD and equity mutual fund flows. The month experiencing the biggest net outflow is September.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in İE

Ireland Ireland Latest News, Ireland Ireland Headlines