September Curse

[magnccu (挑戰未來)]

The September Curse
By Joseph Lisanti, Editor, The Outlook

Stocks have a history of weakness in September,
but the final quarter is usually good.

Since 1928, the S&P 500 has posted an average gain of just 1% in
 the third quarter of the year--the poorest performance of any quarter.
 This year could see more of the same.

September is the reason for the weakness in the period.
The market rises less often in September than in any other month.
 In only 30 of the last 75 Septembers has the market advanced.

On average, the “500” has shed 1.3% during the month. Lest you think
 that poor September performance is a vestige of early 20th century market
history, the average loss for the month of September since 1970 has been 1.1%.

Last year, a dismal one by almost any measure, stocks posted their biggest
 full month decline in September, with an 11% plunge. That was almost 40%
 worse than the performance of the index in July, the second-weakest month
in 2002.

Why is the market so vulnerable in September? Although most of that month
is technically in the summer, people tend to think of the summer season
 as ending on Labor Day. Investors return from their vacations in early
 September ready to take a fresh look at their portfolios. Many could be
inclined to throw in the towel if their stocks are not producing the
 earnings growth they had projected at the start of the year.

Investors are aided in this exercise by securities analysts, who generally
 lower earnings estimates as the year progresses. By the time the third
 quarter is winding down, more than a few companies have taken one-time
charges or otherwise tempered their views of profit growth for the year.
No wonder stocks fall in September.

But equities usually rebound in the fourth quarter as investors look ahead
 to expected improvements in the coming year. In fact, stocks rose in 55 of
 the last 75 Decembers. Keep 60% of assets in stocks in anticipation of
that move.


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