September Is The Worst Month Of The Year For Stocks

Posted on by

Last Updated on November 17, 2020 by Oddmund Groette

Yesterday, the 3rd of September 2020, witnessed a pretty big drop in the stock market with Nasdaq leading the decline with a drop of 5.07%.

Out of interest, I looked at the performance of September going back to 1970, using the S&P 500 (not including dividends). Historically, September has been a very poor month for the stock market. 

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):

September has historically been the worst month of the year. Source: quotes downloaded from Yahoo!finance.

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? I have no idea.