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Don’t Overreact In August

Don’t Overreact In August

| August 10, 2020
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Don’t Overreact In August
Understanding summer volatility.

 

Provided by Peter Livingston

 

One of my favorite Wall Street quotes is from Mark Twain, who said:

 

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

 

But October may need to move over. During the past several years, the month of August has earned the reputation as being one of the more volatile months for stock prices.

 

In August 2019, for example, the S&P 500 Index posted moves of more than one percent in 11 of the 22 trading days.1,2

 

One of the reasons for the past volatility is that some traders are away on vacation, resulting in light volume, which may have the effect of amplifying market volatility. But this year may be different with many people staying closer to home due to the pandemic.

 

August 2020 will stand on its own. But if history is a guide, investors should be prepared that some headlines could result in outsized moves over the next several weeks.

  

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Citations.

  1. CNBC.com, August 31, 2019
  2. Past performance does not guarantee future results. Investing involves risk, and the return and principal value of investments will fluctuate as market conditions change. Investment opportunities should take into consideration your goals, time horizon, and risk tolerance. When sold, investments may be worth more or less than their original cost.
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