Chart of the week: Wake me up when September ends

Knowledge, they say, is cumulative. Yet, when it comes to markets, it often feels cyclical. Investors, regardless of experience, seem to make the same mistakes, driven not by logic but by two timeless forces: greed and emotion.

Take September, for instance. Historically, it’s been the most volatile month for stocks – a time when rational thought seems to take a backseat to something else.

Consider this: over the past decade, the S&P 500 has dropped an average of 2.3% in September, making it the only month with consistent negative returns. Zoom out to post-World War Two history, and September still stands out, with an average decline of 0.8%.

Why? Is there some rational economic force at play? Or is it simply a reflection of collective mood shifts?

The change of season brings a change in attitude – back to school, back to work and the unmistakable signs of autumn. Leaves drop from trees, daylight fades and optimism can wane. It’s no surprise that sentiment cools as the nights grow longer.

This week’s chart highlights the subtle but impactful change in daylight during September. Could this shift in natural rhythm contribute to increased volatility? The timing seems more than coincidental.

Key takeaway: In a market where we accumulate knowledge but still fall victim to the same cycles, it’s worth asking whether we should know better.

As we navigate this transition, the landscape is shifting – interest rates are adjusting and market rotations are emerging. We see an opportunity in UK equities, where the economic picture is improving and valuations still look attractive. It’s worth mentioning that Marlborough has one of the largest and most experienced investment teams in the UK smaller companies field.

If you’d like to dig deeper into the changes we’re seeing in markets or discuss our latest portfolio moves, we’d love to share our thinking.

‍

Find out more about our multi-asset solution

‍

‍

This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.