We’re now less than a week away from the beginning of September, which has earned an unsavory reputation with investors over the years.
We’re now less than a week away from the beginning of September, which has earned an unsavory reputation with investors over the years. Historically, September has been the single worst-performing month for the S&P 500 Index (SPX), the Dow Jones Industrial Average (.DJIA), and the Nasdaq Composite (NASD) (Source: Stock Trader's Almanac). The Almanac says, “September is when leaves and stocks tend to fall; on Wall Street, it’s the worst month of all.” Since 1958, September is the only month in which the S&P 500 shows a negative median return. While the S&P notched a gain in September 2024 and 2025, overall, the 2020s have done little to help its reputation, as the index was down 3.92%, 4.76%, 9.34%, and 4.9% in September 2020 – 2023.
As a result of the poor performance of equities, many investors look for opportunities in other assets in September. One asset that has received a lot of credit for helping investors through this frustrating month is gold, and the numbers below support this statement. Gold has posted a positive return in 22 out of the 38 Septembers since 1987 and has had a double-digit gain three times, including last year when it gained just over 11.5%. In other words, September has been a positive month for gold investments about 58% of the time. The average return for gold during all 39 Septembers comes out to 1.49%, with an average of 5.25% during positive Septembers. From 2020 – 2023, gold finished September in the red but generally performed favorably compared to equities, especially in 2022 when gold outperformed the S&P 500 by more than 7%. Last year, while the S&P was up 3.5%, gold still outperformed equities by around 8%.
In the table below, you will also see the historical September returns for different asset classes as far back as data exists in our system. Not surprisingly, assets like gold, oil, and bonds have provided the best returns.
However, up versus down is just half the story —the magnitude of returns is another thing to consider. Note the two international equity proxies in the table (the developed and emerging stock ETFs). Even though they have historically posted a gain more than 50% of the time, the losing years outweigh the winning years in terms of the magnitude of movement. For example, developed international stocks have seen gains in 54% of the Septembers going back to 1980, producing an average return of 3.4% in those years. However, during the 46% of years when EFA was down during September, the average loss was -5.27%. As a result, the average return for the month of September is in the red at -0.53%. Similar numbers can be seen for emerging markets and US small-cap equities.
Although September is generally viewed unfavorably by equity investors, there have been a few impressive outlying Septembers, such as 2007, 2009, 2010, and 2025, all of which saw gains of more than 3% for the S&P. Even though September has not generally been kind to the broad equity indexes, there have been opportunities provided by sector rotation. Take 2008 for instance. The S&P was down -9.20%, however, the NDW Bank Sector Index (DWABANK) gained more than 5%. On the other end of the spectrum, the steel & iron sector (DWASTEE) fell 31.8%, bringing the performance differential for September 2008 to 37.2%, the second-largest dispersion of all Septembers since 1999. In 2023, while SPX was down nearly 5% in September, the NDW Oil Index (DWAOIL) was up more than 2.5%.
On average, the difference between the best and worst performing groups is around 20% over the last 25 years. In 2024, non-ferrous metals (DWAMETA) outperformed oil by 7.2%, which was the smallest differential over the lookback period. Meanwhile, the largest spread came in 1999 (40.5%).
In the table below, you can see the best and worst performing sectors during September for each year going back to 1999. Precious metals (DWAPREC) have been the most frequent bottom performer, turning in the worst performance six times since 1999 (2006, 2013, 2014, 2017, 2019, and 2021). However, the precious metals index has also been the best-performing group in seven out of the 25 years, more than any other group, including last September when it gained 23%. Semiconductors (DAWSEMI) has been another frequent bottom performer, finishing last in five Septembers.
