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The S&P 500's performance in recent years and recent weeks has offered investors reason for optimism. Over these past few years, the famous benchmark has soared, led by companies involved in the high-growth artificial intelligence (AI) story. These tech giants, from Nvidia to Alphabet, have delivered revenue growth thanks to their AI investments and say this opportunity is far from over.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
All of this has helped the benchmark climb -- even amid headwinds such as rising inflation and uncertainty about when the Federal Reserve will move on interest rates. Now, however, in the early trading days of September, some investors might be thinking more about the headwinds than the tailwinds. That's because of the September Effect. Let's check out what history tells us about investing during what's generally been the worst month for stocks.
First, let's start by considering the phenomenon known as the September Effect. Over time, the S&P 500 has often declined in September. In fact, since 1928, it's the only month in which the benchmark has ended lower more often than higher, according to Citadel Securities. And over that time period, the index declined an average of 1.1%, Citadel's report showed.