Does September Spell A Stock Market Crash?

September 7, 2021

Traditionally, September is the worst month to be on the stock market. Summer blues mean that stock prices fall, and it isn’t like the summer of 2021 has been all sunshine and rainbows! There’s been a whole host of worrying developments across the world, including rising coronavirus cases, the Taliban takeover of Afghanistan and a slowdown of countries such as China.

As we turn the calendar to September, the experts at have considered how likely a stock market crash is.

Why Does September Have A Bad Reputation On The Stock Market?

If you take a look back at some of the most significant financial crashes in modern times, such as the 1929 Wall Street Crash, Black Monday in 1987, and the fold of the Lehmann Brothers in 2008, they all have one thing in common: they occurred in the months of September and/or October.

Therefore, there’s a credible reason behind September’s reputation as the most volatile month for falling shares.

Jason Hollands, the managing director at fund platform Bestinvest, believes we should be worried:

September spells danger for investors, as it is a month with a reputation for volatile markets. This is more than a myth.

In fact, share prices have fallen in 21 out of the last 40 Septembers!

Story So Far This Year?

To get an idea of where the stock market might be headed this September, it’s probably a good idea to look back at what happened earlier this year.

January 2021 kicked off with a 16.2% growth. The reason for this was believed to be the renewed hope the COVID vaccine represented worldwide, and the first signs that the world may actually get back to ‘normal’ life.

What Risk Has This Year Posed?

In the UK, the effects of the coronavirus pandemic and Brexit combined have meant that supplies – crucially in the construction sector – have been hard to come by. This, in turn, leads to inflation, which can cause trouble for movement on the stock market.