September is historically far and away the worst month for stocks. Since 1928, the S&P 500 has had an average decline of 1.2% during the month, while itâs had average gains in each of the other eleven. And the so-called September effect seems to have become more exaggerated over time: in the past decade, the monthâs average slide has been 2.3%. Whatâs more, in the past four years, the slip has been no smaller than 3.9% and as big as 9.3%. And itâs strange that this occurs at all. Weird little trends like this donât usually hang on anymore: machine-run âquantâ funds these days are designed to detect (and profit from) even the tiniest anomalies in the market. And the trades they implement typically spell the end of whatever oddity they discover. So itâs hard to imagine that a doozy like this could escape their notice. Still, it happens. So the September effect is on folksâ minds now. And itâs compounding their other fears â that AI may be a bubble, that the US may be steering toward a recession, that rising geopolitical tensions could hamper global trade, or that some unforeseen risk might come along and cause companiesâ earnings to crumble. Makes sense then that the volatility index â the marketâs so-called fear gauge â shot well higher again last week, rising 36%. To put it simply, investors are on edge. The good news is there are only three more weeks in September. Then investors can turn their superstitious minds to another, happier quirk of the calendar: in US presidential election years, November and December tend to be good months, at least since the early 1990s â with average gains of 3%. | 