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September Market Behavior Since 1929.

  • Written by Syndicated Publisher No Comments Comments
    September 7, 2011

    Oh, it’s a long, long time from May to December, But the days grow short when you reach September. When the autumn weather turns the leaves to flame, One hasn’t got time for the waiting game.

    The classic American pop standard September Song debuted in 1938. The Dow turned in a good month that year, up 1.57%, but over the decades, September has developed a naughty reputation in market lore.

    This year the month is off to a particularly bad start, down 3.21% in the Dow and 3.69% in the S&P 500 in the first two days alone. Europe, three days into the month, is faring much worse, with the FTSE down 5.41%, the CAC 40 down 7.90%, and DAX down a stunning 9.31%.

    With two down and nineteen market days left in September (and in the spirit of market trivia), let’s survey the melody of the months in the Dow since October 1928, the point at which the index was expanded from 20 to 30 stocks. Here are the monthly medians and means (averages).

    Yes, over the years, September has earned the distinction of the most melancholy voice in the chorus. But this fact, taken out of context, obscures an incredible range of performance.

    The chart above shows the distribution from low to high. Let’s close with a look at the 82 Septembers in chronological sequence.

     

    Like all the calendar months, September’s song has oscillated between major and minor keys in seemingly haphazard fashion. The economy may pencil in some lyrics, but the market will play its own tune. Let’s hope this month’s melody ends on a high note.

    From September Market Behavior Since 1929.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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