An Analysis of the 2020 Stock Market September Slump

An Analysis of the 2020 Stock Market September Slump

If you’ve been following Crash Proof Retirement over the past several years, you may remember our discussion of the “September Slump” back in 2019. That’s the name economists have given the stock market based on its tendency to decline in the month of September of every year. Investopedia reports that all three major U.S. stock market indices have experienced an average decline of about 0.5% to 0.8% during the month of September, a trend which goes back decades. While analysts can’t seem to agree on what causes this annual dip, the September Slump has become an accepted and even anticipated part of the stock market cycle. So how does 2020’s September Slump compare to last year’s? And what does it mean for investors who are in or near retirement?

Stock Market Performance September 2019

Before the COVID-19 pandemic, U.S. markets were experiencing some of their best numbers in history. The Dow Jones Industrial Average started the month around 26,000 points – a near record high at the time. It seemed markets were primed for a September Slump, but it never happened. While stock market indices did experience some ups and downs throughout the month, the Dow closed its last session up about 600 points. In September of 2019, investors seemed optimistic about the future.

Stock Market Performance September 2020

One year later, markets were in full-on recovery mode. After reaching an all-time record high in February 2020, the Dow crashed in March when the World Health Organization declared COVID-19 a global pandemic. Shutdowns in China led to supply chain issues all around the globe, and with American businesses feeling the pinch as well, investors were quick to sell throughout the second quarter of 2020. Thanks to the Federal Reserve’s intervention and direct monetary stimulus for U.S. citizens, consumer spending remained steady and a potentially long-term recession was averted. By the end of August, the Dow was approaching another record high and it seemed like markets were on pace to have an even better September than in 2019.
Unfortunately, those trends didn’t keep up. With monetary stimulus packages set to end on September 30th, Congress bickered endlessly as they tried to hammer out a new deal. On top of this back and forth in Congress, the Presidential election began to heat up as the general election in November nears. This uncertainty made investors sheepish and they began selling off their holdings. By the end of the month, the Dow was down nearly 1,200 points from September 1st.

The September Slump and Your Retirement

When it comes to the September Slump, it can be hard to tell if this annual event is a real phenomenon or something created by investors’ expectation that it will happen every year. The fact that 2019’s September Slump never materialized lends credence to the idea that there’s nothing structural causing it; rather, it may be a figment of our collective investment imaginations. That may not be a very comforting thought for those of us in or near retirement, who are depending on markets to stay strong until they can cash out. The closer you are to retirement, the less risk you can afford to take, and the stock market is always risky.

One Crash Proof consumer recently voiced his concerns to Crash Proof Retirement Founder Phil Cannella, expressing his anxiety about COVID-19, the upcoming election, the death of Supreme Court Justice Ruth Bader Ginsburg (and the fight over her empty seat), and the overall divided state of U.S. politics today. This consumer told Cannella how thankful he was to be invested in Crash Proof Vehicles, and how comforting it was to be protected from the volatility of the stock market.

Investors who are in or near retirement shouldn’t leave their nest egg at risk riding the volatile loops of the stock market roller coaster. Whether it is a September Slump, a contested political battle, or an unforeseen phenomenon of nature, investors deserve the peace of mind knowing that their investments are protected through specially designed, proprietary Crash Proof Vehicles that will protect their retirement savings from flying off the tracks. To learn more about these safe, proven alternatives to the stock market, schedule an appointment with one of our licensed Retirement Phase Experts and discover how the exclusive Crash Proof Retirement System has protected the retirement futures of more than 5,000 consumers. Call 1-800-722-9728 or visit our website at https://www.crashproofretirement.com and pull your investments out of the September Slump.