What is the September effect?
In the stock markets, September has a bad reputation, it is said to be the worst month of the year for stocks and that is historically the case.
Since 1970, in September, the Dow Jones has fallen an average of 1%. Since that date, the index has recorded 35 Septembers of falls, out of a total of 54. The S&P500 has recorded an average drop of 0.89% in September, falling in 30 of the last 54 Septembers, according to data from investing.com.
And the Nasdaq, according to available records, since 1980 on average has fallen 0.83%, accumulating 21 falls in the 44 months of that period, that is, less than half.
Although not necessarily all Septembers are negative, in fact from 2017 to 2019 increases were recorded.
The causes behind the gray September phenomenon may be due to a mere behavioral bias of investors.