Historical Patterns Suggest Volatile September, October

The month of September is notorious for large equity market declines and volatility. October is no picnic either. In 1929 the Dow Jones Industrial Average declined 9.7 percent in September, kicking off the October crash. In September 1930, the Dow fell almost 15 percent, and in 1931 about 31 percent. In September 1974, the Dow fell 9 percent, completing a fourmonth slide of 29 percent. More recently, in September 2001, the Dow slid as much as 19 percent, in 2002 14 percent and 2011 almost 9 percent.

Lest we forget, some major events have occurred in September, coinciding with these declines; the Lehman Brothers bankruptcy, World War II officially began, the 9/11 terror attacks. Meanwhile, since 2004, the month is officially designated National Preparedness Month by the Federal Emergency Management Agency. No wonder investors may be wary.

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