Canaccord Genuity Morning Coffee on Dow Jones Industrials (DJIA) Facts About the Month of September
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Canaccord Genuity Morning Coffee on Dow Jones Industrials (DJIA) Facts About the Month of September
The month of September is almost upon us; the kids go back to school and the markets sell off. Investors all too fondly remember last September's 6% drop in the Dow. Russ Koesterich, Chief Investment Strategist of iShares, notes that while investors often pay too much attention to the calendar, September is the notable exception. Looking at data on the Dow, which stretches back to 1896, September has historically been the worst month of the year, with an average return of slightly worse than negative 1%. This is the only month of the year for which the seasonal bias is so great as to be considered statistically significant. The tendency for markets to fall in September is also evident when you look at the win rate – how often equities move higher. The win rate in September is barely 40%, versus nearly 60% for the other 11-months. Finally, this phenomenon is not limited to the U.S. September has historically been the worst month of the year in a number of European markets – including Germany and the U.K., as well as in Japan. While September maybe a downer, the outlook for the balance of the year isn't all bad - see comments from Canaccord Genuity U.S. Strategist Tony Dwyer: "What goes up can stay up".
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The month of September is almost upon us; the kids go back to school and the markets sell off. Investors all too fondly remember last September's 6% drop in the Dow. Russ Koesterich, Chief Investment Strategist of iShares, notes that while investors often pay too much attention to the calendar, September is the notable exception. Looking at data on the Dow, which stretches back to 1896, September has historically been the worst month of the year, with an average return of slightly worse than negative 1%. This is the only month of the year for which the seasonal bias is so great as to be considered statistically significant. The tendency for markets to fall in September is also evident when you look at the win rate – how often equities move higher. The win rate in September is barely 40%, versus nearly 60% for the other 11-months. Finally, this phenomenon is not limited to the U.S. September has historically been the worst month of the year in a number of European markets – including Germany and the U.K., as well as in Japan. While September maybe a downer, the outlook for the balance of the year isn't all bad - see comments from Canaccord Genuity U.S. Strategist Tony Dwyer: "What goes up can stay up".
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