Bank of America Merrill Lynch recently averaged the monthly returns of the S&P 500 over the past 83 years. And September is clearly the worst by a mile. Check it out:
Last week, we noted Citi's bearish warning about stocks in September. The reason, they said, is that summer vacation-related corporate sector downtime in the US and Europe makes accurate forecasting inherently more difficult.
Researchers at the University of Kansas have a more unexpected possible explanation. From the Wall Street Journal:
A University of Kansas study suggests a sharp drop-off in the amount of daylight in New York in September might trigger seasonal affective disorder and make some traders more risk-averse. On average, New Yorkers see 3,147 fewer minutes of daylight in September than they do in August, the biggest drop of any month, according to the study.
But even the researchers aren't confident in that explanation. "From the best of my ability, I think there's something up with September. No matter how you slice it up, it's bad," says the University of Kansas' Mark Haug, one of the authors of the report. "It's frustrating to not have an explanation."
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