Over the past 20, 50, and 100 year periods, September is the only month of the year in which the Dow Jones Industrial Average has closed lower. Over the past 100 years, the DJIA has averaged a decline of 0.96%.
It certainly is possible that the market could move higher this month. However, in addition to the historical data, we have several other factors in place which would suggest a market pullback*:
- Stocks continue to get more expensive.
- Corporate earnings have declined for five straight quarters.
- Insiders have been selling.
Generally, we consider a pullback a 5-10% off a security’s 52 week high as a buying opportunity.
* The Stansberry Digest, September 1, 2016
These are the opinions of Justin Brill and not necessarily those of Cambridge, are for informational purposes only, and should not be construed as individualized investment advice.
