August 30, 2019
August has a reputation as a volatile month, and it sure delivered this year. After nearly two months without a 1% close higher or lower for the S&P 500 Index, market turbulence re-surfaced in August. Over the past month, we’ve not only seen the worst three days of the year, but many 1% swings in both directions.
The good news is August is finally coming to a close, but the bad news is that September is next. Since 1950, September has been the worst month for the S&P 500 Index, which has dropped an average of 0.5% during the month. September’s track record has been a little better recently: Over the past 10 years, the S&P 500 has averaged a 0.9% gain. Nonetheless, we continue to expect volatility to continue, especially since more defensive areas of the market are leading right now.
“August was a burst of volatility for most investors, and we expect that to continue in September,” explained LPL Financial Senior Market Strategist Ryan Detrick. “But if you’re looking for some good news, the past 15 times stocks were lower in August, the rest of the year was actually higher every single time.”
A rough August has been typical, and history shows stocks have overcome the volatility through the rest of the year. As shown in the LPL Chart of the Day, Why Lower Stocks In August Could Be Bullish, returns the rest of the year have been quite normal after a down August. To reiterate, the rest of the year has been higher the past 15 times the month of August was lower.
Please see the Midyear Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets for additional description and disclosure.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
This Research material was prepared by LPL Financial, LLC.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (Member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL is not an affiliate of and makes no representation with respect to such entity.
If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:
|Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit|
For Public Use | Tracking # 1-888588