Since 1950, the weakest months for the stock market have been June-September – thus the saying sell in May go away. The average monthly returns have been as follows:
Note that the only other month to have an average decline is February. So the summer months are seasonally weak ones and we still have September to endure. Hopefully it isn't a bad one and we wouldn't expect anything too dramatic given a healthy economy and strong corporate profits.
Looking ahead to the 4th quarter
The good news is that the fourth quarter is typically a strong one for the markets. Despite October being remembered for Black Monday in 1987 and a horrible month in 2008, it has traditionally been a good one for the markets; and November and December even stronger. Here are the average monthly returns:
Photo: Christopher Wang