September Disaster: How Bad Will it be for Stocks?

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Michael Zuber (0:58)

All righty, folks. Did you know the worst trading months for stocks out of the last hundred years? Yes, folks, we're going to talk about a hundred years of history. And guess what?

It's right now.

The worst trading month of the year is September. We're going to talk to Dan Bird about when does it actually start? Because maybe it doesn't start at the beginning. He'll tell us, and then, of course, he'll give us his best guest when history says this ends. We will also talk inflation, jobs, war in the Fed, but we're starting with September turmoil. Dan, what say you?

Dan Bird (1:34)

Yes, that's correct. I've talked about it. I'm starting to see it a lot, actually, these days. A lot of articles coming out about it, but I've been talking about it for, actually, since the beginning of the year. September, first part of October, usually the worst part of the year.

I've got some data to back it up, going back to 1928, so almost 100 years.

Michael Zuber (1:55)

Almost 100 years, yeah.

Dan Bird (1:56)

98 years. And it is a real thing.

Michael Zuber (2:02)

It's funny, because I remember, when I was in school getting my degree, it was always sell in May and go away, but maybe it should have been sell in August and go away.

Dan Bird (2:14)

Well, I actually did a whole session, one of my YouTube channels, about sell in May and go away, and show seasonality. And it's actually not May.

Michael Zuber (2:23)

Yeah.

SPEAKER_2 (2:24)

It just sounds good.

Dan Bird (2:26)

Yeah, it rhymes.

The actual saying, by the way, is sell in May and go away, come back on Ledger's Day. Ledger's Day is a race, a horse race.

Michael Zuber (2:39)

That happens in October. There you go. All right.

Dan Bird (2:42)

That's the actual saying.

Michael Zuber (2:44)

Well, thank you for that. Well, let's take a look at the day that you captured. Ninety-eight years of history, kind of important to understand. It's not a call on what this September will be, but certainly has 98 years of history.

Dan Bird (2:55)

Yeah, it sounds fabric, but I think this September is setting up for it, frankly.

Michael Zuber (2:59)

Okay.

Dan Bird (3:01)

Yeah, let's get into it. I've got a few things to show. Let me share my screen.

And I'll show my website first. I'm actually going to use my newsletter, which I put out yesterday, right here, this little button. You don't need to be a subscriber to the website. It's free for anybody. Nice. Click right there, you'll get the newsletter. Lots of interesting information on the website if you're interested in all of that. But let's take a look first at Stock Traders Almanac. So what does September look like?

There's what it looks like. So we are right here. Here's Labor Day. So this is Tuesday, right here. And you can see the dash lines are midterm election years, the solid lines are regular years. Solid lines go back to 2005, so 20 years. Midterm years, which is only one every four years, goes back to 1950, so roughly about 20 years for that, too.

Michael Zuber (4:07)

So when we look at the midterm years, Monday's like the peak. That's what that says to me.

Dan Bird (4:14)

Yeah, it's Tuesday, actually. Tuesday's the peak.

Michael Zuber (4:15)

Tuesday, sorry. Tuesday, yeah.

Dan Bird (4:17)

Yeah. Tuesday's the peak for midterm years. But the regular years is the trough, and they kind of meet right here. Interestingly, look where they meet.

SPEAKER_2 (4:31)

Right there, Fed meeting, and CPI.