Market Overview

Argus Analysts: Beware August, The Rally Killer

Argus Analysts: Beware August, The Rally Killer

For some, August marks the beginning of the end of summer. For others, August is time for back to school shopping. For many investors, however, August is also a rally killer month.

According to analysts at Argus Research, the current "unsettled environment" in the stock market also happens to be "amplified" by the presidential election race. As such, investors are going through wild swings of emotions from "euphoria at new highs" to "cries of sell everything on even minor dips."

Meanwhile, the analysts stated that August's performance during the current bull market charge has been "abysmal" with an average decline of 1.51 percent since 2009.

Related Link: August Has Been A Bumpy Ride For The Stock Market Lately

August of 2011 was simply "awful" when the market shed 5.7 percent — not to be outdone by August 2015's 6.3 percent decline in the S&P 500. Other notable poor August performances include 2010's 4.5 percent decline.

Taking a deep-dive look at August's performance over the past 35 years should relieve investors looking for history as an indication of future performance. Since 1980, August has averaged a decline of 0.16 percent.

On the other hand, since 1980, indices finished the month of August higher 20 times and lower only 15 times for an "overall .570 batting average."

More Good News

The report conducted by Argus' analysts is missing one key fact. According to CNBC's Carl Quintanilla, during an election year, August is the best performing month.

"Since 1980, August is the 2nd worst month for the S&P. But in election years, it's the BEST month," he said.

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