Oh, it’s a long, long while from May to December
But the days grow short when you reach September.
T.S. Eliot was wrong about April being the cruelest month. For investment managers, it’s September.
It’s bad enough that September marks the end of summer, shorter days, cooler weather, the beginning of school and the almost annual Red Sox meltdown. It’s also the worst month, by far, for stock market performance.
Since 1955, the Dow Jones Industrials Average (DJIA) cumulatively has lost just under 50% during September, according to “Jay on the Markets.” In contrast, the DJIA has gained 200% in April over the same period. So, in spite of Mr. Eliot’s claims, April is the kindest month, not the cruelest.
May (-10.6%), June (-20.9%) and August (-11.6%) have also registered net losses over that period, as the chart shows, but September losses (-49.1%) total more than those three market-declining months added together. In other words, September is a big loser. Take September out of the calendar and the market would historically be flying high.