Summer Bulls And Autumn Bears

September 2, 2023by Hoy Grimm2

In my January 30th blog post, Lessons from the Old-Timers, I pointed out the historical trend in markets in the year after a bear market occurs. So far this year, stocks are confirming this historical correlation. Through August, the S&P 500 is up 18.7%. Overweight tech components in the index like Nvidia have delivered phenomenal increases in 2023.

When the calendar flips from summer to fall, market sentiment and stock prices often echo a “back-to-business” mood. Portfolio managers look towards year end with an eye to their own personal balance sheets because their compensation is tied to their stock picks. If they bank a good year, they will reap the harvest of their labor (or luck as the case may be). If you were sitting on a 200% increase in a stock after 8 months (like NVDA), what would you be thinking about? I’d look to cash at least a portion of my winnings in and secure the gains. If valuations (P/E, Price/Book etc…) were also above historical norms, veteran portfolio managers would trim their sails even further.

Positioned at the end of summer and the end of the third quarter, September tends to be a pivotal month for stocks. Portfolio managers like to clean up their investment holdings before quarterly reports go out to fund investors in October. Last September the Dow dropped 8.8%. Since 1950, September has been the worst performing month on the calendar for the S&P 500 and the Dow Jones Industrial Average. September has also been the worst month for the NASDAQ since 1971. According to the Stock Trader’s Almanac, the Tuesday after Labor Day delivered negative returns in the Dow and S&P 500 the last 6 years running. While these are only hard statistical observations, it’s hard to ignore.

As you sip on a first pumpkin spice latte this week, be mindful of where your investments are, take a hard look at your stock allocations and try to identify where a prudent professional would be concerned and act. January called for courage after a costly bear market fall. September may require the courage to be fearful in the face of other investors’ greed. Remember, winning by not losing is still winning. As the pros say, “risk management trumps conviction”. If you would like a pro to review your holdings, give us a call.

Hoy Grimm


  • Phil Mathewson

    October 2, 2023 at 12:33 pm

    What law did that guy break?


    • Alex Willard

      October 2, 2023 at 3:59 pm

      Hey, Phil! Honestly, we’re not sure. It’s just a boy and his dog getting some fresh air! Apparently, his wife commented the following, “The amount of money that he’s spent on this whole darn project between the car and the bull I could’ve had a brand-new kitchen.” We’ll see how many future appearances he makes.


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