What's in Store for the Dow this September?

The chart below, courtesy of Chart of the Day, illustrates the Dow Jones Industrial Index’s average performance for each calendar month since 1950 (blue bars) and 1980 (gray bars) respectively. While the strongest upward movement in stocks has historically occurred during the November to January period, September has proven to be the most difficult month for stocks. It is interesting to note how since 1980 the average gain for September has remained negative despite the fact that most of this period included a strong bull market.

click to enlarge

Source: Chart of the Day

These results are consistent with one of my earlier studies showing that the best time to be invested in equities is the six months from early November to the end of April, while the “bad” periods normally occur over the six months from May to October.

Let’s see whether September 2007 stacks up in accordance with the historical picture.

Comments

[WACG:]

The article was a perfect display of the "innumeracy" of most people. The mathematical FACT of the matter is average values reported without confidence intervals (or other measure of dispersion) HAVE NO MEANING in and of themselves. It must be remebered that an average value is a measure of central tendency and there are several/many such measures. An average value is most appropriate if data is normally distributed (a great deal of "financial" data is not). In shosrt, anybody who would act on such half-truth "data" will get what they should - bupkis.

2007 Sep 02 10:00 AM

[yukii:]

The last 6 years in Sept, 4 are up and 2 down.
The more people follow the seasonal charts the less accurate they are.

2007 Sep 02 03:06 PM

[Bright Inve...:]

Investors may become very wealthy if they have purchased a large stake with Countrywide stock. Investors will be lucky if Warren Buffett purchases Countrywide stock. This is mathematical FACT. This may be a better topic for the author.

2007 Sep 02 04:22 PM