September in the Markets...

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liquid

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I'm relatively new to the field of Finance, and keep hearing this "jargon" about how bad Septembers/Octobers are in the markets. What is the reality behind this?

Thank you.
 
http://www.google.com/search?hl=en&q=worst+months+for+the+market

Whoa! Who'd have thought that information was available, for free, on the internets!
 
On another note you will also hear the term Summer doldrums...Which refers to the fact that during the summer months trading volume is typically lower than the rest of the year as analysts, traders, corporate execs, et. al take their vacations and there is an absence of market driving news.
 
Wow... Interenets, what's that?

The reason I asked here is because I wanted some insight from people on this board. Google can pull up everything and anything. But thanks for the tip.



exemplaria Wrote:
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> http://www.google.com/search?hl=en&q=worst+months+
> for+the+market
>
> Whoa! Who'd have thought that information was
> available, for free, on the internets!
 
I think the "use google" or "search the forum" posts are getting a bit excessive. Part of the reason I use AF is to see discussions and to read questions that I just haven't thought about.

When liquid, or some other random poster, asks a question that is not often discussed, it gives others a chance to think about the situation.

liquid's post was not a common subject. Those who are saying "use google" in this case are actually hurting the forum, not helping.
 
Danny boy, fully agree with you....it's not a stupid question or something.

Btw, google search says Aug, Sep and Oct are the worst trading period.

It doesn't follow the pattern every year...so is it just anomaly type of thing?

or there is a reason for it?
 
ummm interesting point of view...

so it is the worst month coz
1. "back to school" mentality
2. last month of the quarter
3. end of fiscal year for many mutual funds.

then i guess the question is.
1. does it exist? there's really a fun in august and back to work on sep mentality?
Sydney also suffer from such "bad month" but but we don't have holiday in August.
and yet I see nothing much on March (our summer vacation ends on Feb)

2. this explains no crap. why 3rd quarter in particular? what happen to Dec(best quarter?) March and June?

3. same as 1. with Australia cases.

No offence, but one news article is really not strong enough and plus CNN published something saying August is the worst month (from that google line providd) yet in this one...record shows a +0.02%....

Just some points come out naturally when I see this kind of news...
 
I didn't say it was my opinion, just something I was able to find with about a half second's worth of research. If you think something is wrong with it, why don't you A) respond in a coherent manner and B) do your own research.
 
i think all exemplaria is saying is that a lot can be found doing your own search before coming with a question. if the original poster had said that he'd looked and this is what he found, what does everyone think, then we would be talking about why aug through oct is worse (or whatever) instead of criticizing/defending him/her asking a question.

how many of us have asked a boss a question only to have them ask us if we looked at x, y, or z? how stupid do you feel when you haven't looked there and even more so when you go look and then find the answer in x, y, or z?
 
I'm relatively inexperienced and I was hoping somebody could help me with the following...How do I tie my shoes?

Please help as I have been having trouble finding velcro strapped shoes that look good with a suit.
 
With a question like that I would have thought it'd be nice to get the perspective of someone inside the industry who isn't speaking with a reporter. It is usually nice to speak with a primary source vs. reading about it in a news site. Plus, as any of us who work in finance know, what we say to people outside of the company is dressed up and not always the whole story. If no one should be asking questions like this, then this forum would lose its utility.
 
My hope in asking this question was to get an educated discussion with relevant information from people who have more experience in this area. I've read some articles on this topic, but most seemed pretty vague. Evidently some people missed the point as to what forums are for.
 
An educated person is sitting right here, telling you this is not a very interesting question. Everybody thinks their own threads are the best, but this one just ain't so great.
 
That's great, and thanks for the input. However others may disagree. Last I checked I really didn't need your approval to post a question, nor do I care to have your 2cents put in every 30 seconds. You summed up your thoughts in your first post, so thanks for that..... now let it go.





exemplaria Wrote:
-------------------------------------------------------
> An educated person is sitting right here, telling
> you this is not a very interesting question.
> Everybody thinks their own threads are the best,
> but this one just ain't so great.
 
I wasn't try to start an argument but questioning about the "half a sec research"
you could do research easily but if this is an assginment or a project, you still gonna
chuck out an one line website answer.
no joking, ppl give you stupid project for whatever they want to know....

I believe liquid post the question to get an answer, and I provided my view,
it is a public forum, it will be greatly appreciated if you could participate only the
"educational" and "interesting" questions..

liquid,
back to my reply, "I don't know" is the simple answer.
but if you are a "invisible hand" believer - that is, market drives trades.
then it might be an aswer. by that, I mean it started once or twice long long time
ago, ppl start to make big news out of it, and then when it comes to this month,
you see ppl sell for no reason. It is likely an irrational behaviour of general
investors to cause supply >> demand, hence all price down.
 
Thanks Takumi. I appreciate the response.


takumi Wrote:
-------------------------------------------------------

> liquid,
> back to my reply, "I don't know" is the simple
> answer.
> but if you are a "invisible hand" believer - that
> is, market drives trades.
> then it might be an aswer. by that, I mean it
> started once or twice long long time
> ago, ppl start to make big news out of it, and
> then when it comes to this month,
> you see ppl sell for no reason. It is likely an
> irrational behaviour of general
> investors to cause supply >> demand, hence all
> price down.
 
liquid, 'September being the worst month in the market' is one of the market anomalies alongside the Jan small caps effect, the Fri-Mon effect, and the day-before-holiday effect. i've always found the topic of market anomalies fascinating an did quite a lot of research in the field both at my undergrad and postgrad studies - opinions and empirical research results vary, but here is what Prof. Jeremy Siegel at Wharton wrote on the topic (it's the best explanation of the Sep effect i've come across so far!):

"Summer months are good, but after the summer holidays, watch out! Sep is by far the worst month of the year and, in the US, is the only month to have a -ve return incl. reinvested div. Sep is followed by Oct which has a disproportionate % of crashes. � Why the market experiences these monthly variations is unknown. Maybe the poor returns in late fall have nothing directly to do with economics but are related to the approach of winter and the depressing effect of rapidly shortening days. In fact, psychologists stress that sunlight is an essential ingredient to well-being. Recent research has confirmed that the NYSE does significantly worse on cloudy days than it does on sunny days. However, Sep is also a poor month in Auz & NZ, where it marks the beginning of spring and longer days..."
 
relinquo Wrote:
-------------------------------------------------------
> Do investors succesfully trade on these effects?
> Eazy money, no?

not anymore as much as in the past. in earlier years when there hasn't been so much talk/research/writings into market anomalies people made money, however, as these effects got more publicity more investors were drawn in and returns went down. besides, even if you successfully manage to market time it and manage to get some extra upside, the trade commissions of getting in and out might not justify it.
 
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