Courtesy of Joshua M Brown, The Reformed Broker
Mark Hulbert makes a nuanced point in his MarketWatrch column about the historical behavior of stocks during the month of September.
On the one hand, he finds that this is really and truly the cruelest month…
Let me first review the impressive statistics behind September’s terrible reputation. Since the Dow was created in 1896, it has lost an average of 1.09% during September. The average return during all other months, in contrast, has been a gain of 0.75% — a spread of 1.84 percentage points between September and all other months’ average.
That’s huge, from a statistical point of view.
Not only that, September’s dismal performance has been remarkably consistent. Consider what I found when I focused on all decades since the late 1800s: September’s performance rank relative to other months was 8th or below in all but one of those decades. In fact, the month was in last place in five of the decades, and in 11th place in three more.
These results are highly unlikely to be a mere random occurrence, according to the tests I ran on my PC’s statistical software.
However, he cautions readers from acting based on this knowledge, head over below for why.