5 Best Stocks To Buy For A Dreadful September
Zacks Investment Research | Aug 31, 2016 09:53PM ET
For long, the month of September has earned an uncanny reputation of providing low returns, with the S&P 500 and the Dow usually ending in the red.
Possibility of an imminent rate hike has further irked investors, while gyrations in oil price rattled the stock market in August. Add to this the overvaluation of stocks, and we can very well expect a correction in the near term. Hence, it will be judicious to invest in stocks that boast strong fundamentals and growth potentials.
Historically the Worst Month
September is an appalling month for the U.S. stocks, as far as historical data is considered. Since 1928, the S&P 500 has tanked almost 56% of the times in September, as per Bank of America Merrill Lynch (NYSE:BAC) data. Similarly, the month has also been dismal for the Dow Jones Industrial Average. Since the blue-chip index was created, it has shown an average loss of 1.1% in September; while in all the other 11 months the index posted an average gain of 0.8%.
Furthermore, this terrible September record is not just because of two or three horrible years. On the contrary, stocks have been persistently posting unimpressive performance in September, with the month’s average turning out to be discouraging in all but one of the dozen decades since the late 1800s.
Add to this, the current limited daily movements and low volumes in the broader markets and we all know that there is a correction in the cards. The S&P 500 is already trading in a narrow range and its volume is plummeting to multi-month lows (read more: Zacks Investment Research
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