“You Retire Once… I Help People Retire Everyday”
August was quite the rollercoaster, but in the end the S&P 500 added 2.4% for its fourth consecutive monthly gain. On top of that, all four of those months gained at least 1%. As I have highlighted several times in recent commentary, the best three months of the year during an election year have historically been June, July, and August. That played out nicely once again, with the S&P 500 up 7.4% in the summer months this year, right in line with the 7.3% average.
While I continue to remain constructive on equity markets, we cannot ignore the potential for some pre-election jitters and seasonal weakness over the coming two months. The data doesn’t lie, and September has historically been the worst month of the year the past 10 years, 20 years, and since 1950. The spin, this is an election year.September is historically the third worst month during election year with only February and October being worse.
Continuing the election theme, think about the last two elections. 2016 and 2020 both saw stock weakness ahead of contentious elections, only to see stocks soar at the end of the year once the election uncertainty was behind us. It would be prudent to advise investors to perhaps buckle up, as I wouldn’t be surprised at all to see that pattern play out once again this year.
The fundamentals appear to be strong enough to warrant a conclusion that any near-term weakness will simply be a detour in our journey to the destination which I believe will be higher by yearend.
In this edition of ‘Monthly MarketPerspectives’, we recap the month of August, dig into and put perspective on the recent volatility, get under the hood of Q2 earnings and help investors digest what to expect for the month ahead as we approach another highly contested U.S. election.
In closing, I am beyond grateful for the trust you put in both myself and Sterling Mutuals. As a valued investor and partner, my commitment to you will always be to share my unbiased opinion of what is really happening. It’s times like this where putting context into the situation helps clients become well informed, better educated, and ultimately successful longterm investors.
Regardless of the path ahead, you can be confident that you have an investment professional in your corner who is committed to your success every step along the way.
Thanks for taking time out of your day to become better informed.
Click on pdf link below to read full edition.
-Aaron Pedlar
