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Do You Remember…a Stock Slide in September?

Historically, the 9th month of the year hasn’t been kind to investors.

“April is the cruelest month,” wrote poet T.S. Eliot—who, we assume, didn’t own stocks.

History tells us that September has a well-established track record of treating equity investors poorly. The chart shows that the first month of fall tends to deliver far and away the worst returns of any month of the year. While the chart summarizes the average monthly returns since 1928, this pattern has also held over the past five, ten, and 20 years.

Source: Bloomberg, 09/05/23

None of this means a down month in September is a sure thing—if only investing were that easy! Still, recent history isn’t on investors’ side: The S&P 500 has suffered a negative return in September of 2020, 2021, and 2022 (down -9.3%, -4.8% and -3.9%, respectively).

As we move into the ninth month of 2023, however, there are some signs of hope that the market could buck its historical trend:

  • The S&P 500 last week climbed back above its 50-day moving average (one measure of market momentum).
  • The labor market participation rate recently hit a post-pandemic recovery high as more people enter the labor force.1
  • Job growth overall continues to slow modestly, making the sought-after economic “soft landing” more likely.2

Of course, incoming data will largely dictate the market’s direction—particularly inflation and labor market data. Our tactical approach to asset allocation should enable us to opportunistically shift portfolios’ exposure as necessary based on what we view as new developments while helping to keep investors “on plan” during market uncertainty.


1 FRED®, August Labor Force Participation Rate       
2 August Jobs Report: US Job Growth Forges On, The New York Times, September 1, 2023.

This commentary is written by Horizon Investments’ asset management team.

Past performance is not indicative of future results.

Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments.

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Reference to an index does not imply that any account will achieve returns, volatility, or other results similar to that index. An index’s composition may not reflect how a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. Individuals cannot invest directly in any index. Indices are unmanaged and do not have fees or expense charges, which would lower returns.

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Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves risk of loss, and in periods of market growth, risk mitigation strategies can be expected to lag in performance behind equity strategies that do not focus on risk mitigation.

This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed.

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