First the bad news: September is the worst month for stocks. The good news, though, is you can still find stocks that at least beat the S&P 500.
Eleven S&P 500 stocks, including O'Reilly Automotive, Ameriprise Financial and United Rentals, outperformed the S&P 500 during September in each of the past five years, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
It's important to note, though, beating the market in September doesn't mean making money. Only six of the 11 stocks that beat the S&P 500 during the month the past five years posted an average gain during the period.
"Start of business year, end of vacations and back to school made September a leading barometer month in the first 60 years of the 20th century," says "The Stock Trader's Almanac. "Now portfolio manager back after Labor Day tend to clean house."
September Is A Tough Month For Most S&P 500 Investors
There's a reason S&P 500 investors get nervous in September. It's earned the rap as the worst month.
The S&P 500, on average since 1950, dropped 0.5% during the month, The Almanac says. And lately, it's been worse than that.
The S&P 500 fell 3.2% on average in September in the past five years. And it's fallen more times than not: three out of the past five years. One of the worst Septembers in modern times was the last one: A 9.3% plunge in September 2022. Still, the record for the worst September is the 11.9% decline in September of 1974, The Almanac says.
But you can still find ways to outperform — or even make a little during the ill-fated month.
O'Reilly Automotive In Pole Position In September
In a month known for pessimism, it's easy to see why O'Reilly Automotive might thrive. It caters to people looking to keep their existing vehicle rolling a little longer, rather than going all-in on buying or leasing a new car.
Shares of the consumer discretionary company also manage to eke out a small average gain of 2% in September — the top average gain in the month in the past five years among all S&P 500 stocks.
There's somewhat of a fundamental backing. The company is on track to report a September-quarter profit of $10.31 a share, up 12% from the same year-ago period. Shares are up more than 11% this year.
Stability In Style In September
Given how volatile the S&P 500 can be in September, there's little surprise stability matters to investors this time of the year.
Take the business of financial advisor Ameriprise Financial. Clients tend to stick with their advisors for many years. The stock, too, feels the pressure in September. Just less than the S&P 500. Last September, shares fell 6%. But that was less than the 7.1% lost by the S&P 500. And on average, the stock has risen by 1.4% during the last five months of September.
So brace yourself for September. Just know that when you're looking to survive a tough month, even a small gain beats a loss.
Top S&P 500 Stocks In September
Beat the S&P 500 in the ninth month for five straight years
| Company | Ticker | Avg. Sept % ch. | Sector |
|---|---|---|---|
| O'Reilly Automotive | 2.0% | Consumer Discretionary | |
| Ameriprise Financial | 1.4% | Financials | |
| United Rentals | 1.3% | Industrials | |
| Etsy | 1.0% | Consumer Discretionary | |
| Gartner | 0.9% | Information Technology | |
| International Business Machines | 0.1% | Information Technology | |
| Ralph Lauren | -0.2% | Consumer Discretionary | |
| MetLife | -0.2% | Financials | |
| Home Depot | -0.3% | Consumer Discretionary | |
| United Airlines | -0.3% | Industrials | |
| Berkshire Hathaway | -1.2% | Financials | |
| S&P 500 | -3.2% |
