…wake me up when it ends (Green Day, 2004).

September has historically been a poor month for the S&P 500 on average. 

Why? My take is:

• Summer is over. Many investors took it easy on watching names during their vacations. Getting back to the grind in September brings a new critical eye to all the things they may have missed.

• For a good portion of September, the quiet sets in. Companies go into their quiet periods in advance of earnings reports that start in October. The Fed also goes into their quiet period in advance of their September meeting—this time the much-anticipated rate cut one (which looks more likely post-jobs numbers today). 

In short, with the absence of information, the market can act like it was left on read—with assumptions made that usually don’t lean positive.  

The good news about the seasonality is that markets historically recover nicely thereafter—particularly in November. For long-term investors, these short-term swings shouldn’t matter. But it’s something to be aware of—if for nothing else than to keep emotions in check.