Coming off of a volatile month of August, where the S&P 500 index fell by over 6% on a total return basis, many stock market investors are looking for indications of what lies ahead for the final four months of 2015. To this end, it is often said that September is one of the most, if not THE most, difficult months each year for stock market investors. While every market cycle is different, and past performance is not a guarantee of future results, we thought it would be appropriate to look at the recent performance history of the stock market, as measured by the S&P 500 index, to see if this long held contention has some validity.

Looking at market data provided by Bloomberg, we found that over the course of the last 25 years, there have been 12 times when the market finished lower, on a total return basis, for the month of September (i.e. approximately 48% of the time). In our view, September of 2015 also is shaping up to potentially be another volatile month with downside pressures resulting from uncertainties around Federal Reserve interest rate activity, China and the depth of this particular market correction.



Going back even further to 1928 would show the month of September as being the most difficult month, on average, for stock market investors over the course of each year.



This does not necessarily mean that this September will be as difficult or that the market cannot rebound coming out of a difficult September and finish the year on a high note. There is even some historical precedent for such strong calendar year finishes, regardless of the performance of the stock market during the month of September. According to a MFS “By the Numbers” piece on September 8, 2015, over the course of the last 25 years, the S&P 500 index has gained more on a total return basis during the 4th quarter; which includes the months of October, November and December, of the year than the index has gained during the other 3 quarters – combined. Since 1990, the final 3 months of the year have gained +253.1% on a total return basis versus a gain of +181.3% for the first 9 months of the year.

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