August 27, 2021 glacierinvest

August is typically a slow month in the stock market. There isn’t a lot of news flow and volumes (the number of shares traded) are low. A mass exodus from the office for vacation is a large driver of the slowdown. Interestingly, August is the second worst performing month for the S&P 500 over the past 40- and 70-year time periods. Not that monthly performance should impact your investment decisions, it is nonetheless interesting to observe September and August are the two worst performing months while April and November are the best performing months. More than anything, this information can provide valuable insight if you’re being weighed down by the performance of your portfolio in a given month. Again, it shouldn’t be the driver of investment decision making, but it can provide contextual relief (and anxiety for that matter).

Looking at 2021, April has so far been the best performing month which lines up nicely with historical results. However, August is the second best performing month so far in 2021. We still have a couple of days left for that to change but for now August is putting in an abnormally strong showing, at least by average historical standards.