There's no debating the fact that for the past 70 years September has earned the dubious distinction of being the worst month of the year for the broader market, with the S&P 500 (^GSPC) down an average of 0.5%.
There's also no debating the fact that in the past one to two decades, September has looked far less scary. In fact, as Ryan Detrick of Schaeffer's Investment Research outlines in the attached video, the past decade has seen the ninth month of the year deliver positive results 70% of the time (up seven of ten years) with an average gain of 0.5%.
"To me, I see a lot of similarities right now with this little market weakness that we're having, that we saw in April," he says. "The recent history shows September really isn't a big month to fear just by itself."
This September Surprise is just one of the reasons Detrick thinks it's time to stay invested. Another is we are entering the month on a high note, with year-to-date gains for the Dow (^DJI) going to September in excess of 10%.
When that's the case, Detrick's research shows the market closes the year higher by 3%.
"Again, a strong rally going into September, the last 20 years, that is not a reason just to blindly sell," he says, noting that the current uptick in fear and 5% correction could have created a buying opportunity, just when the masses are looking to sell.
"When expectations are low, to us, that's when you want to buy," he states, adding that maybe the dreaded September won't be as bad as most people think.
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