September Effect

That sinking feeling you get when you realize that school's about to start? The excitement you feel at the beginning of the new NFL season?

Uh, no. It's a historical trend on Wall Street.

September traditionally unfolds as a weak month for the stock market. Maybe everyone's too worried about their kids going back to school and/or too excited about the new NFL season to spend too much time buying stocks. The stated wisdom has to do with traders getting back to work after summer vacations.

As you can tell from that explanation, though, the "September effect" isn't exactly an air-tight, scientifically-proven phenomenon. Instead, it's based mostly on tradition, mixed with a little data. However, the statistics showing the veracity of the September effect depend a lot of the time period you're studying.

Whatever the case, perception can sometimes become reality. Many Wall Street folk think September is a weak time for stocks, prompting them to worry about buying shares during the month, thus diminishing demand (if only on the margins).

Oh well, maybe spend a few weeks betting on NFL games instead. We like the Vikes this year.