What Is The Worst Month Of The Year For Stocks? It’s September

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Last Updated on October 16, 2021 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%. Is this a coincidence? Perhaps not, because:

What is the worst month of the year for stocks? 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, 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 and holding through September – holding cash rest of the year):

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.

 

Disclaimer: We are not financial advisors. Please do your own due diligence and investment research or consult a financial professional. All articles are our opinions – they are not suggestions to buy or sell any securities.