The chart below, courtesy of Chart of the Day, illustrates the Dow Jones Industrial Index’s average performance for each calendar month since 1950 (blue bars) and 1980 (gray bars) respectively. While the strongest upward movement in stocks has historically occurred during the November to January period, September has proven to be the most difficult month for stocks. It is interesting to note how since 1980 the average gain for September has remained negative despite the fact that most of this period included a strong bull market.
Source: Chart of the Day
These results are consistent with one of my earlier studies showing that the best time to be invested in equities is the six months from early November to the end of April, while the “bad” periods normally occur over the six months from May to October.
Let’s see whether September 2007 stacks up in accordance with the historical picture.