STACY BUSH: Why this September could defy a tough trend<\/p>\n
Published 7:12 am Saturday, September 13, 2025<\/p>\n
This September presents unique opportunities \u2013 and risks \u2013 for investors, setting the stage for a month that could break from historical patterns. While September has long had a reputation as Wall Street\u2019s \u201cdanger month,\u201d this year\u2019s strong technical momentum and recent record highs in the S&P 500 suggest that investors should tread thoughtfully, but not fearfully.<\/p>\n
Historical September returns<\/p>\n
Over the past 75 years, the S&P 500 has averaged a return of approximately -0.7% in September, with less than half of those months posting gains. This makes September statistically the worst-performing month for stocks, lagging far behind the typical monthly rise of about 0.6% across the calendar. The likelihood of a positive return in September is just 44%, compared to higher odds in all other months, highlighting persistent seasonal headwinds.<\/p>\n
Momentum matters \u2013 technical analysis<\/p>\n
However, simply relying on seasonal statistics would ignore key market signals currently at play. Technical momentum is notably strong: the S&P 500 recently reclaimed its all-time high, finishing August with a gain of 1.9% and notching five new record closes. More notably, the index has traded north of its 200-day moving average \u2013 a critical technical indicator \u2013 for over three months. Historically, when the S&P 500 enters September above this threshold, the average September return jumps to +1.3%, with 60% positive outcomes. This contrasts starkly with the average September decline of 4.2% when the index is below its 200-day moving average.<\/p>\n
The role of August momentum<\/p>\n
August\u2019s performance is an important predictor for September. If the S&P 500 closes August \u201cin the green,\u201d it tends to carry beneficial momentum into the next month, averaging a gain of 3.2%. Conversely, ending August in the red flips this average to a 3.8% loss. This year, 2025, meets several \u201cdanger criteria\u201d: August saw the S&P 500 gain 1.9% and set five new all-time highs, a combination that has, in eight previous instances since 1961, led to negative September returns every time. Such technical patterns matter to institutional investors who watch trend indicators closely and may adjust their positions based on them.<\/p>\n
Macro backdrop and near-term risks<\/p>\n
Despite record highs, there are several reasons to exercise caution. Implied volatility tends to rise in autumn, and the CBOE Volatility Index (VIX) is currently at year-to-date lows, suggesting potential for increased market turbulence as major economic events \u2013 like Fed meetings and employment reports \u2013 unfold in September.<\/p>\n
Political and macroeconomic uncertainties, including anticipated Federal Reserve rate decisions, can amplify volatility.<\/p>\n
Historical data also points out that September frequently hosts notable corrections, especially following hot streaks in August. Major declines followed strong Augusts in 1987, 2008, and 2020.<\/p>\n
What should investors do?<\/p>\n
For long-term investors, the underlying message is to focus on extended horizons and maintain diversified portfolios, even as seasonal headwinds loom. The historical average yearly return for the S&P 500 \u2013 dating back 75 to 150 years \u2013 has historically averaged 9% to 10%, though future results may differ significantly. This highlights the benefit of disciplined, passive investing, rather than letting calendar effects dictate major allocation shifts.<\/p>\n
Short-term suggestions<\/p>\n
Be aware of September\u2019s historical tendency for weakness but recognize the stronger odds for gains when momentum is positive and the S&P is above its 200-day moving average.
Monitor the macro environment closely, especially volatility indices and key economic reports, which can drive short-lived market swings. Consider technical levels and recent performance before adjusting short-term equity positions. Institutional flows may be defensive if major event risks emerge.<\/p>\n
Long-term perspective<\/p>\n
Consider staying invested for long durations, as the compounded annualized returns of the S&P 500 remain consistent over extended periods, even factoring in inflation and dividends.
Use short-term dips as potential buying opportunities for high-quality companies, provided core financial fundamentals remain intact.<\/p>\n
Balance awareness with current signals<\/p>\n
While September\u2019s history reveals legitimate risks, this year\u2019s exceptional technical backdrop and August momentum could set the stage for a very different scenario \u2013 for both seasoned and new investors. Maintaining discipline and staying alert will be essential, but succumbing to calendar-based fear may mean missing out on opportunities in a market buoyed by strong underlying trends.<\/p>\n
Investors should balance seasonal awareness with current technical and economic signals, seeking long-term growth beyond the volatility typical of September.<\/p>\n
Advisors and financial professionals may have differing compensation structures or incentives. Investors should consider potential conflicts of interest and consult their advisor for details.<\/p>\n
Stacy Bush is with Bush Wealth Management. This information should not be construed by any client or prospective client as the rendering of personalized investment advice.\u00a0 For more information, please visit BushWealth.com for our full disclosures.<\/p>\n
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