Investors ending their fiscal year can lead to some market weakness.

The stock market notched its seventh straight month of gains in August and the Standard & Poor’s 500 index has set 53 new highs so far in 2021.

During August, stocks rallied as investors looked past the increased number of COVID-19 delta variant cases and barely reacted when the Federal Reserve said it might begin tapering its monthly bond purchases by year-end. 

But it’s a new month, and you should expect to see an article or two about what’s called the “September Effect.” September is when many professional investors end their fiscal year, which can lead to some overall market weakness.

When I see articles about the September Effect, I’m reminded of my favorite stock market quote by Mark Twain.

“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

There’s always going to be some market theory, opinion or model that suggests we’re in “this cycle” or “that trend.” Over the years, we’ve found that the best strategy is to ignore the noise and focus on your investing goals.

This information should not be construed by any client or prospective client as the rendering of personalized investment advice. All investments and investment strategies have the potential for profit or loss, and there can be no assurance that the future performance of any specific investment or investment strategy including those discussed in this material will be profitable or equal any historical performance levels. Investment strategies such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Any target referenced is not a prediction or projection of actual investment results and there can be no assurance that any target will be achieved. Stacy Bush is with Bush Wealth Management.