History Says September Is the Worst Month for Stocks. Here's What Investors Should Actually Do.

Historical stock market data indicates that September has traditionally been the weakest month for the S&P 500. Since 1928, the benchmark index has registered an average total return of negative 1.17% in September, ending the month in negative territory in 56% of years, making it the only month with a negative long-term historical track record. Additional research highlights that when the S&P 500 gains over 1% and records five or more all-time highs in August, September performance tends to face heightened negative pressure. Despite seasonal headwinds, financial analysts caution investors against trying to time the market by liquidating stock positions. Selling ahead of September carries tax burdens and upside timing risks, especially considering the S&P 500 has averaged a 13.4% gain over the 12 months following a record high between 1988 and 2023, outpacing the 11.9% average across all rolling 12-month periods. Investors are advised to maintain automatic recurring contributions to capitalize on pullbacks, prepare watchlists for quality stocks experiencing dips, and rebalance drifted allocations rather than exiting equity markets in response to seasonal volatility.