Historically, September is the worst overall month for stock market returns. And since 2009 has already seen a great stock market rally, some analysts think we’re due for the obligatory pullback and consolidation next month. So if you’re looking to do any purchasing, you might want to keep a close eye on the markets and have some extra cash ready for that time when the stocks and funds on your watchlist make their dips.
Trend For Seasonal Weakness in September and Other Market Miscellanies
I thought I’d share with you some other “market minutes” that I’ve been hearing and reading about recently from various commentators appearing on Canada’s BNN and from other analysts’ articles.
- To see the last time there was a consecutive 5-month run-up of 49% in the US stock markets you’d have to go back to the 1930’s. For this reason and the continued weakness in real economic numbers in the US, some are calling this a speculative market.
- While September usually always sees lower returns, crashes often happen in October due to overreactions to September numbers.
- Larry Berman sees a 10-15% pullback on the major Canadian banks over next 2-3 months. Says they rallied up quite a bit higher than he expected. Don’t buy them at current levels, he says.
- Year to date, there has been a huge outflow of money from funds based in US markets and has flown into Asian emerging markets instead. Specifically, 39 billion+ has been withdrawn from US markets and 36 billion has gone into emerging markets globally (14 billion of which went to Asia).
- There is also now about an equal amount of cash in ETFs as there is in mutual funds. This will be the year that ETFs begin to takeover mutual funds in terms of total assets.
- “Apparently 20% of personal income in the U.S. now comes from the government.” (Andrew Bell, BNN – mid-conversation, not sure where he got the data or how was calculated)
- Of last month’s GDP numbers in China, 80% came from government spending, up from an average of 40% historically.
What’s your opinion on seasonal investing, whether or not you’re a market timer? Have you witnessed or read about any marked changes in markets based on where we’re located in the year? For example, the so-called “jewelry season” in India and China has historically been counted on as a factor in driving up gold prices in the final third of the year.
Either way I know I’m going to be doing some buying, so I’ll probably be posting more on the markets over the next couple of months as I pay attention to major movements. It’s market timing, yes, but generally I do it only on the “buy” end – I like to hold my investments as long as possible. But of course I want to pay a good price, so of course I’m going to “market time” and pay as little as I have to for my stocks.Related Posts
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- Stock Market Trends in December 2009: What Should You Invest In At the End of the Year?
- Why You Should First Invest in Dividend Reinvestment Plans (DRIPs)
- Nouriel Roubini Says Markets Will Shut, Get Out of US Dollar Now