Home About Archives RSS Feed

@theMarket: September's stock market

By Bill Schmick
iBerkshires 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.
 

 

0 Comments
     

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
Williams Football Improves to 2-0
Richardson Stops 18 Shots in MCLA Soccer Loss
Housing, Economy Discussed In First Housing Summit
Fall Foliage Leaf Hunt Clues for 2018
Cheshire Posts Town Administrator Position
Adams Faces More Than $1M In Storm Damage
William Pitt Sotheby’s International Realty Taps Brokerage Manager
Barrington Stage Company Board of Trustees Welcomes New Member
Berkshire Immigrant Center Names New Advisory Board Members, Leadership
Southern Vermont College Board of Trustees Names New Member

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (268)
Independent Investor (366)
Archives:
September 2018 (2)
August 2018 (9)
July 2018 (2)
June 2018 (8)
May 2018 (8)
April 2018 (7)
March 2018 (6)
February 2018 (7)
January 2018 (7)
December 2017 (8)
November 2017 (5)
October 2017 (5)
Tags:
Jobs Bailout Oil Europe Energy Congress Commodities Stocks Euro Debt Ceiling Banks Selloff Currency Rally Retirement Deficit Fiscal Cliff Japan Markets Wall Street Recession Election Interest Rates Metals Taxes Crisis Debt Stock Market Economy Greece Housing Federal Reserve Europe Pullback Stimulus
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Record Highs and More to Come?
The Independent Investor: Dogs and Their Cars
@theMarket: September's stock market
The Independent Investor: How Prepared Are You to Sell Your Company?
@theMarket: Record Highs Coming Up?
The Independent Investor: Should You Bury Yourself?
The Independent Investor: Turmoil in Turkey
@theMarket: Will Stocks Break Out or Break Down?
The Independent Investor: Should You Pay Down Your Mortgage?
@theMarket: Stocks Set for a Volatile August