September affect in Election years on stock markets in US.. There are two reasons why traders might want to resist the urge to go to cash in September, despite the month’s reputation as terrible for the U.S. stock market.
The first is that this reputation derives from Septembers of the first three years of the U.S. presidential term. During election years, the U.S. stock market in September performs no worse than average. The other reason not to go to cash: Some industries and sectors counter the overall market’s September slide.
September’s reputation as a losing period for stock investors is well deserved — if we focus on the average of all years. Since the Dow Jones Industrial Average
was created in 1896, it has gained an average of 0.8% in all non-September months. In the average September, in contrast, the Dow has lost 1.1%. That spread of 1.9 percentage points is hugely significant from a statistical perspective.