Selena Maranjian, The Motley Fool
4 min read
Here we are in September. It’s back-to-school month for millions of kids. Summer will give way to fall around Sept. 23. Some leaves in your region may have begun to change color. For many reasons, including cooler temperatures, we often look forward to or enjoy September. But many investors actually dread it.
Statistically speaking, September tends to be a lousy month for the stock market. According to Dow Jones Market data (as of 2025):
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The Dow Jones Industrial Average DJIA has averaged monthly declines of 1.1% in Septembers going back to 1897, with declines in 57.8% of Septembers.
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The S&P 500 index (SNPINDEX: ^GSPC) and the tech-heavy Nasdaq Composite index (NASDAQINDEX: ^IXIC) have, on average, dropped by 1.1% and 0.9%, respectively, going back to 1928 and 1971.
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The S&P 500 has finished in the black 44.9% of the time since 1928, while the Nasdaq has posted positive monthly returns 51.9% of the time since 1971.
See? It can seem a little scary. (But note that plenty of Septembers feature increases!)
Should you worry about “the September Effect”?
I’m not worrying about what’s going to happen to my stocks in September, and I don’t think you should, either. Why? Well, because what can you do about it? You might sell many or all of your stocks now, waiting for October, but that’s market timing — which doesn’t have a great track record, either.
Here’s what a 2025 report from Vanguard has said about market timing:
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“Bull market surges have been longer and stronger than the bear markets that preceded them.” So getting out of the market at a downswing can mean missing some or much of a big upward run.
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“Timing the market is futile; the best and worst trading days often happen close together.” If you sell on one day, the market might surge over the next few days, leaving you on the sidelines.
Larry Fink, CEO of BlackRock, the world’s largest money manager, agrees, saying in a recent annual letter to shareholders:
Over time, staying invested has mattered far more than getting the timing right. Over the past two decades, every dollar invested in the S&P 500 grew more than eightfold. Miss just the ten best days, and you would have earned less than half. And some of the market’s strongest days came amid the most unsettling headlines.
