Dating back to 1928, the S&P 500 posts negative returns, on average, only two months out of the year: February and September.
February is modestly negative, averaging a -0.11% return, while September is a bit more of a drag, averaging a -1.08% return. (Yardeni Research offers a handy chart that shows each month’s average historical return.)
In other words, according to nearly a century of data, if you invest at the beginning of a month, you’re far more likely to have made money at the end of that month than to have lost it.
Will that pattern hold up this September? Nobody knows for sure, of course, but it’s worth keeping that possible volatility in mind, even as the long-term bull market moves forward.
Given that the market has been strong this year, if relatively uneven (and with the September caveat out of the way), I wanted to check in with some of our expert analysts here at Cabot for their takes on how the market is shaping up for the rest of 2026.
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Here are their latest thoughts.
Mike Cintolo – Cabot Growth Investor
Up first is Mike Cintolo, who recently opined that the short- and intermediate-term evidence may be frustrating, but that the longer-term evidence is clearly still bullish.
“The word tedious can mean different things to different people, but for growth investors, the recent period certainly qualifies. In fact, taking a step back, most of the past 10 months does as well—when you look at the period from November through March (Nasdaq down about 9% in total) and then June through August (down 2%), the market has spent eight of the past 10 months churning, with all the gains and then some coming in April and May.
“Happily, we were able to grab some winners during that two-month window and, along with some other moves, it’s the main reason we’re up on the indexes this year. But we’re always going with what’s in front of us, and with more worrisome news (Treasury rates, oil prices and potential Fed rate hikes) hitting the wires, we’re seeing something of a buyer’s strike, with very few stocks hitting new highs this week while most indexes hack around.
“Over the years (and after many mistakes), we follow two simple rules in these environments. The first, as a growth investor, is to not overtrade: While many novices get in trouble by ignoring time-tested ideas (cutting losses, letting winners run, etc.), many experienced players fall victim to overtrading, jumping in and out on every piece of good news or rally, only to get caught in the ensuing dip. That doesn’t mean you can’t nibble here or there, but overdoing it usually results in a portfolio taking on water due to death by a thousand cuts.
“The second rule, ironically, points in a different direction: While you want to be doing relatively little for as long as this up-down action continues, you still want to keep your optimist’s hat on when looking down the road. In other words, you don’t want the tedious, tricky and often frustrating current environment to bleed into the big-picture evidence—which today remains positive, with even the worst-performing index (Nasdaq) not far from new highs and with longer-term trends (Cabot Trend Lines) pointed up.”
Michael Brush – Cabot Insider Edge
Michael Brush, Chief Analyst of Cabot Insider Edge, is a bit more cautious, suggesting that the market remains vulnerable to a pullback. You can read more about his rationale here.
Chris Preston – Cabot Value Investor
Chris Preston (who remains long-term bullish) wrote in mid-August that he favors value stocks in the weeks ahead.
“When the indexes faltered in February and March, and again in June and July, value stocks outperformed by a wide margin. I’d expect that to be the case again over the next few weeks, and possibly well into September – historically the worst month for stocks by a wide margin, with an average loss of more than 1% in the S&P 500, dating back to 1928.
“By contrast, value stocks have risen by an average of 4.7% in August and September the last two years, including gains in each of the last two Septembers. Every year is different, but seasonally, this is the time of year when investors start to pump the brakes (or book profits) on growth and downshift to value plays.
“It would not surprise me to see that scenario play out again over the next six weeks.”
Tyler Laundon – Cabot Early Opportunities
Tyler recently acknowledged the market’s crosscurrents—as well as stretched sentiment—and advised that pullbacks certainly remain possible. But he views the latest earnings season as having put a lot of concerns about the AI-driven rally to bed.
“The market is still dealing with plenty of crosscurrents, from elevated rates and lingering inflation concerns to geopolitical uncertainty in the Middle East.
“But the biggest takeaway from the last few weeks is straightforward: Fantastic earnings results are pushing the market higher.
…
“Digging into the earnings theme just a little bit deeper, one of the most encouraging recent developments is that the evidence is showing the investment rationale behind the AI spending boom is starting to look a lot less theoretical.
“[A portfolio holding], along with several other AI infrastructure names, showed that massive investments in data centers, cloud capacity, power, networking and compute are translating into real revenue, backlog growth, margin strength and cash flow. Sure, investors may still question valuations, but these companies’ results make it a lot harder to argue that the money being spent on AI is disappearing into thin air.”
Putting It All Together
Our analysts continue to have faith in the multi-year bull market, even as they acknowledge the potential for some speed bumps here in September.
And while the headline indexes have been choppy and periodically range-bound, many other areas of the market are performing quite well, including small-cap stocks, value stocks, international stocks, and more.
So if you’re interested in learning more about the sectors and asset classes that are beating the major indexes, consider a membership to Cabot Prime Plus, which gives you access to a full range of investing strategies and each of the analysts quoted above.
Right now, we have a special offer available for new members.
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