Is September the Stock Market Worst Month? Here are the Facts

A Historical Record of Stock Market Gains by Month

financial stock marketCymorfund Stock Picks Investment Letter today examines the predictability of seasonality trading.

Investors are continually searching out clues so as to predict the future of the stock market. A common investing strategy is to compare how the markets did in each month over many years.  We rely today on an analysis by Guggenheim which points out that when every year between 1929 and 2012 is compared, the worst performing month is September.  “Historically, September is the worst month for U.S. stock market performance. Since 1929, the S&P Composite Index has averaged -1.1 percent for September, making it one of only three months with negative average returns over that time. “

 

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How Important is This Information?

If there were a reliable way to predict what the stock market would do, it hasn’t yet been discovered. Historical information is a always a guide to the future, but nothing more than a guide. When (if) someone ever determines in the present, what the future will be, that person will be rich beyond comprehension.

Alas, the only accurate predictors of the future of the stock market are the traders of Wall Street, who bring their vast sums of capital to bear on the stock markets and use this leverage to take money from the average investor. Because they, and they alone, have the economic power and knowledge to create temporary rises and falls in a sector, or in a stock, they alone can predict the market. A prime example of this is how the price of gold was influenced and intentionally driven down by ruthless speculators (see Cymorfund article of April 17, 2013 for a detailed explanation) .  Another example is the shorting of the commodity sector – see Cymorfund article of June 7 2013 to understand how Wall Street raked in billions by forcing commodity stocks down.

 

The Market Never Ever is Predictable

 What we have this year, is a group of factors that differs in scope and complexity from any period in history. We have QE (Quantitative Easing) and uncertainty as to whether these programs will wind down, and uncertainty of when these programs will wind down. We have positive signs from the US economy and last month the EU actually showed positive growth. 

We could go on as to positive and negative factors, but the bottom line is that it is only a hunch as to what will happen. More to the point, it is usually the Unexpected that has the greatest bearing on the movement of the market. Whether it be positive unexpected earnings, or a war somewhere, the White Swan event or the Black Swan event will have greater influence on the performance of the market, than any historical data.

 

Cymorfund Investment Letter Prediction

We make these comments with trepidation, as predicting the future is inherently risky. At best, the odds are even as to whether the prediction will become reality.

We think the general markets will show weakness.

We think the commodities markets will show strength.

Sell the large caps.

Buy the commodity stocks.

 

We may or may not have positions in securities we name. In making an investment decision consider numerous factors such as portfolio balancing, timing, cash and capital reserves, asset allocation and other. Do your own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied.

Views expressed are opinions and not investment advice. You should retain a licensed professional to guide you and  not rely on the opinions expressed herein. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer. The information contained herein is based on sources which we believe reliable but is not guaranteed as being accurate or a complete statement or summary of the available data.

 

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.