Do a quick search for annual Labor Day sales and Google delivers. From specific store discounts to curated lists of the best 195 deals (only the top 195?!), September can be a good month to scoop up bargains.

One item was missing from these lists: shares of publicly traded US businesses. Or, more simply, stocks.

It’s no secret September has historically been a tough month for the stock market. Here are a couple fun facts:

• Since 1928, September is the only month for the S&P 500 whose median return is negative. See the chart below. That’s right – stocks have been down more than half the time during September. 55% of the time, to be precise.

• Four of the 20 worst months for the S&P 500 happened to be in September. However, most of these were a looooong time ago. Three of these months happened to be in the 1930s, around the Great Depression and the 1937 recession. The fourth was in 1974, during one of the worst bear markets of the 20th century.

• The worst month on record for the S&P 500 also belongs to September. In 1931, the index fell 29.9% during the month.

• September has been among the worst-performing three months of the calendar year 36 times since 1928, or nearly 4 out of every 10 years.

But 2022 feels like a strange year. Has September been any better when the market is already down for the year?

Unfortunately, no.

In the 19 previous years when the stock market dropped at least 5% between January and August, the median return for stocks in September was -2.5%. Stocks were higher in September just six times during these years.

Why has September been so lousy? More importantly, should investors do anything differently?

“The September Effect” seems to be one of those market anomalies that’s difficult to explain. Some theories include:

• Fund managers sell poor-performing stocks so they aren’t visible in quarterly reports

• Investors want to lock in gains for the year (not much of an issue this year!)

• Individuals sell stocks to replenish cash after summer travel and back-to-school spending

None of these theories hold a ton of water in our view. Maybe it’s just coincidence.

Regardless, short-term market calls are notoriously difficult to get right. Especially on a consistent basis. Despite all the data above, those betting against the market in prior Septembers would have been wrong about 45% of the time. We prefer to avoid these calls altogether.

Last week, we talked about buying in a bear market. Psychologically, being both early and late can be challenging. Buy too early and feel regret watching account values fall. Buy well after the bottom and experience FOMO (fear of missing out) during the first few months of the recovery. And short of having an investing superpower that allows you to know, real-time, when the market is bottoming, you’re likely to feel at least one of these emotions during down markets.

What’s the point?

Timing is hard. Short-term volatility can tug at our emotions. And having an investment plan aligned to long-term goals can help remove some of the emotion from investing.

Interested? Reach out to DIVVI to continue the conversation.

Opinions expressed herein are solely those of Divvi Wealth Management and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation.