, by Jeffrey Hirsch and Yale Hirsch, is a great book with a lot of useful stock market trends, indicators, and historical data of stock prices. It even includes a weekly calendar. They have analyzed the average month to month percentage change for the Standard & Poor’s 500 since 1950 and have found that the average performance for nine of the months were up, two of the months, February and August, were flat, and one was down substantially, the month of September.So why is this? Why do investors dump their stocks in September, driving the stock market down? Here is a list of possible reasons.
1. Mutual funds want to dump their losing stocks before the end of the third quarter in order to free up funds for investing fourth quarter.
2. Hedge funds doing the same thing.
3. Mutual funds doing profit taking by end of third quarter (window dressing).
4. Hedge funds doing the same thing.
5. Investors sell stocks to pay for their summer vacation credit card bills.
6. Investors sell stocks to pay for their kids' fall college tuition.
7. The last day to file your tax return with extensions is October 15. Investors sell in September to have funds to pay their tax bill in October.
8. Investors selling in September due to fear of being in the market during October (the month of major crashes: 1929, 1987, 1989, & 1997).
9. Uncertainty over earnings of consumer goods companies for the third quarter due to so much vacationing during the summer.
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