Why do equities typically perform poorly in September and October? Investing in U.S. Financial History: Understanding the Past to Forecast the Future author Mark Higgins, senior vice president at Index Fund Advisors, was the person I went to for answers.
To improve clarity, the responses have been modified. Why do stocks seem to be particularly poor in September and October? Has it been like this forever? Yes.
On Wall Street, the late summer and early autumn have historically seen the biggest panics. All the way back to the 1800s is when this originated.
Panic of 1873, Black Friday, 1869, and the Panic of 1907 are a few prominent instances of extraordinary panics. Nevertheless, why September and October? That’s an result of an earlier flaw in the banking system in the United States.
The United States’ ability to modify the money supply in response to market conditions was restricted before the Federal Reserve Act of 1913, which reinstated a central banking system.
Source (CNBC)
