An trader works on the New York Stock Exchange's floor in New York City, New York. March 3, 2020. Andrew Kelly/Reuters
September has been historically the worst month for stock market returns.
The average stock return for September since 1928 has been -0.1%, with only 46% win ratio.
However, after such a strong start to 2018, September market returns could be more robust than consensus.
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September is historically the worst month for stocks that generate returns. However, recent strength in S&P 500 may change this.
Fundstrat data shows that September has had a stock market return of 0.1% since 1928. The win-ratio was only 46%.
According to LPL, September was an average down month for stocks in both the past 1o and 20 year and post-election years. LPL also reported that stocks experienced a 10% correction last year despite a rapid recovery from COVID-19.
Investors are likely to be cautious about the next four weeks due to September's tendency for stocks to fall. Fundstrat data indicates that September is a good month for equity returns, with markets seeing strong first half.
The stock market has delivered 1.4% median returns since 1928. In September, it had a win-ratio 67%. This was compared to the 13% gain in the first half. In the first six months 2021, the S&P 500 was up by more than 15%
Investors should not be surprised if stocks continue their upward trend in seasonality data. August was a positive month for stocks, despite historically low equity returns.
LPL stated that September could be a down month in the stock market. Investors should still take advantage of the dip to buy the stock, as "this bull market" is alive and well.
