Summer has come and gone, and while here in Vancouver it seemed short, we are excited for September. What’s not to love? Football (NFL) is back. Baseball playoffs start soon, and hockey training camps are starting up. Not to mention the kids are back in school. And after a low-volatility summer in the markets, our attention at Trivest turns to September. For the world of investing though, September is actually a bit more ominous.
Historically, September is the worst performing month for the S&P500, returning an annual average return of -0.68%. You may have read about this already, and are nervously checking your news feed for impending doom. But keep in mind, despite the fact that September is historically a down month with 37 of the last 66 years negative, that still means 29 were positive. Hard to pick a winner when the split is that close. Every pattern has exceptions, and it is impossible to accurately predict when these will happen.
However, even if the markets are down, remember these 3 things:
1) The impact will likely be minor to your portfolio
2) Any impact will likely be recovered in subsequent months
3) Points 1 & 2 do not apply if you overreact and sell in a panic
To reiterate point 2, the UK’s Brexit vote, which wiped out trillions in world markets, was recovered in a matter of weeks. And those who jumped out, have missed record highs in certain markets.
That’s why, as always, we say it’s time in the market, not timing the market.