The Nasdaq Has Fallen in 48% of Septembers Since 1971. Here's What That Means for Nvidia and Micron.
Historically, September is the weakest month in the stock market.
Overview
The September Effect is a persistent calendar anomaly in the capital markets, as stocks tend to deliver weaker returns in September than in any other month. This matters because it is not merely a statistical oddity. Institutional investors, mutual funds, and individual traders treat September as a period of heightened risk, a perception that becomes self-reinforcing.
After the quiet summer trading in July and August, portfolio managers return from vacation, reassess positions, and often trim winners or dump laggards ahead of the fourth quarter. Some funds operate on fiscal years that end in September or October, creating a short window for tax-loss harvesting.
Details
The combination of lower liquidity, renewed scrutiny of valuations, and a psychological shift from summer complacency to autumn caution historically produces an average decline in the Nasdaq (NASDAQINDEX: ^IXIC), even though September often finishes higher.
Source
Originally published at www.fool.com.