September is here and life will now get back to a routine for so many of us. For many market players, though, a September routine is filled with trepidation. The month has a bad reputation. Is it deserved?
Let’s look at the last five years to see how they turned out for September. Going back any further than five years seems irrelevant, as the market world changed forever in 2008.
True in 2008, the market fell almost 10% and in 2011, it fell 7%, but in four of the last five years (2009-2014), it has a combined 4.4% return and in 2010, the return was 8.7%. So far so good, but is there more to see?
Well, yes, there is. Given the passing of the 2008 financial crisis, the calming of the political waters regarding the US debt, the resolution of Europe’s banking woes, the emergence of the US economy from recession, the continued improving health of the US economy, an improving labor picture, a generally happy consumer, the recent better-than-average earnings reports, and the reasonable average return over five years (4.4%), I can see no reason that September would be any different from any of the other positive Septembers in the last five years.
Of course, there is the crazy man in Russia who might just do the unthinkable and there is the ever increasing possibility of another terrorist attack on US soil that could surpass 2001. Either of these could set the market back considerably but, if all things remain equal, meaning, if the market can simply look to the fundamentals, all should be fine this month.
We will see some selling here and there until the market solidifies its position at these new lofty heights. Today is an example. Overall, though, until we see more month-end economic data or until the next earnings reports come out, the market will probably remain within a defined range and it will need a catalyst to jump up or fall down.
In the meantime, there is opportunity out there. This month could be research month. I have noticed some recent activity in the solar sector, for example, and with the rapid advance in electric cars, batteries are getting hot, as well.
There is a quiet little battery stock I own that is now producing products from a nano-technology process called electro-wetting. I bought it years ago when all it was doing was research, but in the last three years, it has brought out three quite innovative products. My point is that batteries are coming online in ways heretofore unheralded. I expect in the next year, we will hear more from companies developing nano-technology batteries and other nano-tech products as well.
September might be good or it might not, but whatever it turns out to be, it won’t be that because it is September. More than likely, with the big boys and girls back in town, it will be what it will be because of the fundamentals. No doubt, though, the money will begin flowing, as it has the last five autumns.
Trade in the day; invest in your life …
