Goodbye and good riddance

Happy Friday!

September is over, and just like every year, it sucked. 

It was the first losing month in the S&P 500 (down 4.76%) since January. It was also the worst overall month since – you guessed it – last September. I’ve said this many times before, but I just don’t know why September has been such a bad month for stocks. 

Maybe, just maybe it has to do with the fact that September is always a massive letdown for three reasons:

First, coming out of the misery of the summer heat, we all expect the global thermostat to drop 15 degrees ten minutes after Labor Day, but that’s just not how it works. September is still miserably hot in like 92% of the country until early/mid-October. It’s not a climate change thing either. Look at the data going back 100 years and September weather just sucks.

Second, kids are back in school, which we think will solve all our problems. But it doesn’t because kids are psychos for the first 3-5 weeks of the school year. They need this time to acclimate back to a structured environment where they don’t get 100% of the attention 100% of the time. This creates difficult mornings and afternoons for everyone.

Third, the realization that the September to November corridor is one of maybe two windows of the year where there’s no break from work within reach (the other being from President’s Day through Memorial Day). Sure, there’s Columbus Day (only if you work in the bond market) and the Jewish holidays, but fasting is not a holiday. It just can’t be (disclaimer: I’m not Jewish so I really don’t know what I’m talking about here). We go in thinking, “finally I can get some work done,” but then we look down the long runway and start to fantasize about living in Europe where hard work was outlawed centuries ago.

Here’s my point: Maybe investors take out their September frustrations on the stock market? 

Anyway, October isn’t much better for investors. It’s not as much of a losing month as September, but it tends to be a volatile one. Given the spending bills and debt ceiling drama, I’d wager we see more volatility in the coming weeks.

But since we all know by now that volatility and risk are not the same thing, let’s do our best to keep our heads on straight. Monthly performance is only slightly more useless than annual performance.

Lastly, here’s a great meme that my brother sent me earlier in the week: