Baker Column: September Investing

By Dr. Richard L. Baker, AIF
Executive Vice President/Wealth Advisor

Sometimes you have to carry your canoe. If you have ever been on a float trip in the Ozarks you’ve probably run into some shallow water and had to carry your canoe downstream to better water.

You don’t like it. It’s hard getting out and the canoe is heavy with all your coolers and snacks. But you know that’s part of floating in late summer.

September is the shallow-water equivalent of the investing year. It has historically been the S&P 500’s worst month of the year for returns and since 1980, September has been the only month to average a loss.

Don’t get me wrong, not every September has been negative. It has had market gain 45% of the time, but the trend I notice is that it has been negative 55% of the time since 1980. 

There has also been some notably bad September’s for the S&P 500 such as 1986 (-8.5%), 2001 (-8.2%), 2002 (-11%), 2008 (- 14%), 2011 (-7.2%) and 2020 (-4.2%) according to Argus Research Company.

The reason for this is that September is a transition month. The traders are all back from vacations and the companies we invest in start focusing on the second half of the year. By September the companies on the stock exchange have a pretty good idea if they are going to hit their projections and start dropping hints.

Leading into this year’s September we find the markets at near all-time highs despite the Afghanistan withdraw disaster, the beginning of social restrictions due to the spiking COVID cases, and the Fed’s possible tapering by year-end. All of these things put more pressure on the markets during the already historically difficult September pattern.

It could be a bumpy or volatile month for the markets, but if you are invested as you should be you will be fine. It’s not a time to take great risks that are outside your investing norms. Stick to your investment plan and you will get through it.

I remember complaining to my Poppy as a boy about having to carry our boat over the shallow water rapids. I don’t remember his exact response, but it was something along the lines of, “Suck it up buttercup and help me carry this boat.” With the possibility of a volatile September market just go with it. Get through it because there will be calmer water up ahead.

Have a blessed week,

All investment and financial opinions expressed are intended as educational material. Although best efforts are made to ensure the information is accurate and up-to-date, occasionally unintended errors and misprints may occur. Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management ("PCWM") and Qualified Plan Advisors (“QPA”). Securities offered by Registered Representatives through Private Client Services, MemberFINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated. Dr. Baker has attained his D.Min., the designation for Doctor of Ministry, and his AIF, the designation for Accredited Investment Fiduciary.