What is the worst month of the year for stocks? Let’s look at the statistics for the last 50 years and find out. It turns out the historical performance of the months varies a lot. Some months are better than others!
September has been, by far, the worst month of the year for stocks since at least 1970. The average gain in September has been a negative 0.58%!
September is the worst month of the year for stocks
Out of interest, we looked at the performance of September going back to 1970, using the S&P 500 as a proxy for stocks (not including dividends), to find out what is the worst month of the year for stocks.
It turns out that September is the worst month of the year for stocks followed by August. In other words, the two worst months of the year for stocks happen to be two nearby months.
The chart below shows the performance from the close of August until the close of September for the last 50 years (investing 100% of your equity and holding through September – holding cash rest of the year):
The stock market has risen a lot since 1970, but an account worth 100 000 in 1970 is only worth 71 171 at the end of September 2019……..
The performance of September compares to this for all months:
| Avg. gain % | Win-ratio % | |
| January | 1.28 | 60 |
| February | 0.17 | 57 |
| March | 0.86 | 63 |
| April | 1.51 | 71 |
| May | 0.44 | 61 |
| June | 0.33 | 57 |
| July | 0.64 | 49 |
| August | 0.02 | 56 |
| September | -0.58 | 46 |
| October | 0.82 | 58 |
| November | 1.37 | 70 |
| December | 1.45 | 74 |
Why is September bad? We have no idea.
What is the worst month of the year for stocks? – conclusion
September is by far the worst month of the year with August in second place. This is one of the reasons why sell in May and go away seems to be correct.
FAQ:
– Has the stock market overall seen growth despite the poor performance in September?
Yes, the stock market has shown considerable growth since 1970. However, the content highlights that even with overall market growth, an account worth $100,000 in 1970 would only be worth $71,171 at the end of September 2019.
– What does the chart illustrating the performance from August to September reveal?
The chart shows the historical performance of stocks from the close of August to the close of September over the last 50 years, with an investment strategy of holding 100% equity through September and holding cash for the rest of the year.
– What is the significance of the performance trend since 1970?
Despite the overall rise in the stock market since 1970, the content notes that an account worth $100,000 in 1970 would only be worth $71,171 at the end of September 2019, emphasizing the consistent underperformance in September.
