Stefan Bacik
Czech Republic
6m
Dear investors and followers, Welcome to another monthly recap of my portfolio. I’d like to share with you the most important events of the past few days. We closed the month of August with a solid result of +4.36%, which I consider a success. September is also looking quite good so far – as of today, we are up +2.9%. This result is even more valuable when we realize that September is historically the weakest month in the markets. By the way, I’ve come across quite a few articles on this topic recently. Are you also wondering why September has such a reputation? I did a bit of research, and here’s what I found. Why is September weak? September is often called a “problematic” month – and it’s not just a myth. According to historical data since 1938, the average return for September is around –1%, making it the weakest month of the year. Why is that? There isn’t a single cause, but rather a combination of factors: Seasonal investor behavior -After the summer holidays, big players return to the markets and start rebalancing their portfolios. They often take profits after the summer rally. -Companies and funds prepare for the end of the fiscal year (in the US it ends on September 30), which leads to sales as part of “cleaning the books.” Macroeconomic pressures -September is often the time of political debates about the US budget (debt ceiling, government shutdown threats). These always increase market uncertainty. -The Fed also tends to decide on interest rates during this period, which contributes to higher volatility. Psychology and statistics -investors are aware that September is historically weak → sometimes it becomes a self-fulfilling prophecy. -Trading volume usually rises after the holidays, bringing more volatility. Historical events -Some major market crashes started in September/October (e.g., Lehman Brothers’ collapse in 2008, or the aftermath of September 11, 2001). This strengthens the perception of September as a risky month. Conclusion From my own experience, I know that when something is talked about too much in the markets, the exact opposite often happens. So let’s wait and see how the second half of the month unfolds. Have a great day!
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