On this last day of August in anticipation of September (and in the spirit of market trivia), let's survey the behavior of the months in the S&P Composite since 1928. The Composite is a spliced index of the earlier S&P 90 with the S&P 500. Because of its greater breadth, I prefer it to the Dow for historic research of this sort.
Market lore is full of monthly associations: The January Effect, Sell in May and Go Away, Summer Rallies, the September Slump, Manic-Depressive October, December Rallies, etc. With August now on life support, a look at September's track record seems in order.
The first chart shows the average monthly gains/losses, excluding dividends, since 1928 for all twelve months. September is by far the worst performer. Incidentally, the monthly average of all months lumped together is 0.57%. So September underperforms the mean by 1.75%.
Click charts below to enlarge
Dividing the Timeline
Has September consistently been a poor performer? The next three charts divvy up our 82-year period into three parts: 1928-1949, 1950-1981, and 1982-present. The rationale is that the first chart includes the Crash of 1929, Great Depression, WWII, and ends around the time of the secular market bottom in 1949.
The second chart covers the cycle from the beginnings of the post-war rally through the Decade of Stagflation and market bottom in 1982. The third chart begins with the great Boomer market that followed and runs to the present.
Of course we could slice and dice the decades any number of ways, but an overview and three subsets (a four-chart total) about maxes out my energy and interest in this topic.
September has been a performance laggard in all three timeframes and the worst performer in two of the three. May (a chronically unimpressive month until the 1980s) takes the booby prize for the 1945-1981 time slice.
Without further ado, I'll let the next three charts speak for themselves.
Lest the charts above give the false impression that September is a consistently poor performer, let's close with a distribution of performance over the past 82 years.
Let's hope September 2010 behaves more like it did in 1939 and not like in 1931.
Disclosure: No position