Home About Archives RSS Feed

@theMarket: September's stock market

By Bill SchmickiBerkshires columnist
Next week, Wall Street's big boys return to their offices. Campaigning for mid-term elections moves to the front burner, and tariff threats between the U.S. and China will likely escalate. Welcome to one of the worst months of the year for stocks.
 
It is true that both September and October tend to be negative months for the averages. Since 1945, the S&P 500 Index has, on average, lost 1 percent. In addition, it is a mid-term election year where Septembers are almost always rocky months for the market.
 
One could say that investors face an entire fall season of potential risks. Besides those I have already listed above, there will be the implementation of the new Iranian sanctions to contend with. And don't forget the recent free fall in so many emerging market currencies because of a stronger dollar and rising interest rates. We also have another budget deadline for Congress coming up. Last, but not least, are some events in Europe that bear watching.
 
The Italian budget, which is due at the end of September, could be contentious, since the budget promised to the voters may not be acceptable to the European Union. That could trigger another crisis of confidence like, but more serious, than, the recent troubles in Turkey. Brexit is another on-going concern, as is the outcome of our potential tariff talks with the European Union on autos.
 
All the above should maintain, or even elevate, that "wall of worry" that we have been living with since January. The good news: despite these concerns, the S&P 500 Index, along with most other averages, have reached record highs in the last week. The S&P is now up 9 percent for the year and NASDAQ is even higher.
 
Given these obstacles, readers should not be surprised that a growing chorus of market pundits are warning of a 5-7 percent decline in stocks "soon." OK, that's probably a fair guess, given the gains we've had, but so what. Do you really want to time the market here for a normal, and shallow pullback?
 
Statistically, while September and most of October are rocky months, the historical data says that whatever losses one incurs in the next two months, will be more than made up for by the end of the year. Are you good enough to guess the top, sell, and then get back in for a measly 5 percent? If you are, please manage my money.
 
Another thing with this "danger ahead" scenario is the number of people that are predicting this will happen at any moment. In the space of one week, my electrician, a dentist, two cab drivers and a librarian have all told me (and are convinced) that not only is the economy on its last legs, but the stock market was teetering on the edge of a precipice.
 
When I asked what led them to believe that this decline was imminent, they answered with conviction.
 
"They are all saying it."
 
I never did get them to explain exactly who "they" were. The answers ranged from "those guys on the TV," to "my book club members," or "a neighbor who is in the business." As a contrarian, I've heard these kinds of concerns in the past. It usually means that when the pack is leaning one way, you should be looking the other way. I say stay invested, look beyond a month or two, and prosper by the end of the year.
 
A reminder, there will be no columns over the next two weeks while my wife and I are in Norway on vacation.
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $400 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
 

 

     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Scoil Rince Bréifne Ó Ruairc Participated in North American Open Championships
Pittsfield Police Participating in US 20 Speed Enforcement Project
MassDOT Project Will Affect Traffic Near BMC
Dalton ADA Committee Explores Expanding
Milne Public Library Trustees Announce New Library Director
Clark Art Presents Free Thematic Tour on Music in Art
BCC, Mill Town Partner to Support Philanthropy Through 40 Under Forty
SVMC' Wellness Connection: March 15
Pittsfield Community Meeting On Rest of the River Project
Slavic Easter Egg Decorating At Ventfort Hall
 
 


Categories:
@theMarket (480)
Independent Investor (451)
Retired Investor (183)
Archives:
March 2024 (5)
March 2023 (4)
February 2024 (8)
January 2024 (8)
December 2023 (9)
November 2023 (5)
October 2023 (7)
September 2023 (8)
August 2023 (7)
July 2023 (7)
June 2023 (8)
May 2023 (8)
April 2023 (8)
Tags:
Interest Rates Pullback Greece Federal Reserve Recession Jobs Stocks Japan Election Debt Currency Taxes Stimulus Commodities Congress Europe Energy Fiscal Cliff Economy Europe Crisis Metals Debt Ceiling Banks Oil Bailout Markets Banking Deficit Employment Retirement Stock Market Selloff Euro Rally
Popular Entries:
The Independent Investor: Don't Fight the Fed
Independent Investor: Europe's Banking Crisis
@theMarket: Let the Good Times Roll
The Independent Investor: Japan — The Sun Is Beginning to Rise
Independent Investor: Enough Already!
@theMarket: Let Silver Be A Lesson
Independent Investor: What To Expect After a Waterfall Decline
@theMarket: One Down, One to Go
@theMarket: 707 Days
The Independent Investor: And Now For That Deficit
Recent Entries:
@theMarket: Sticky Inflation Slows Market Advance
The Retired Investor: Eating Out Not What It Used to Be
@theMarket: Markets March to New Highs (Again)
The Retired Investor: Companies Dropping Degree Requirements
@theMarket: Tech Takes Break as Other Sectors Play Catch-up
The Retired Investor: The Economics of Taylor Swift
@theMarket: Nvidia Leads Markets to Record Highs
The Retired Investor: The Chocolate Crisis, or Where Is Willie Wonka When You Need Him
The Retired Investor: Auto Insurance Premiums Keep Rising
@theMarket: Melt-up in Markets Fueled by Momentum