[pullquote]September is when leaves and stocks tend to fall; On Wall Street it’s the worst month of all … Stock Traders Almanac[/pullquote]
Why does the public get so anxious about September? It’s one of the most stressful months of the year, and this year should prove to be even more challenging. Summer vacation is over and it’s time to get back to work.
The first item on our agenda should be facing September’s history of negative statistics and crashes. While MrTopStep provides its own ideas and research we also have certain key people we follow. Today we highlight a story by one of them, Mohamed El-Erian, the CEO and chief investment officer of Pimco, the world’s largest bond fund.
El-Erian recently told investors to “prepare now for tricky times ahead.” He says the next few months will be volatile for the markets because of uncertainty coming from the US, Europe, Japan, and the Middle East. MrTopStep thinks the weeks ahead could prove to be some of the trickiest in many years.
- “Don’t wait to reposition portfolios as uncertainty will trigger volatility.”
- “August is usually a bad month to make dramatic investment changes because traders are off on holiday and market volume is so light.”
- “… reconsider the conventional wisdom of waiting for the autumn to reposition [your] portfolios.”
He also said that “we are already seeing selling tied to a possible intervention in Syria” and the possibility of an increase in regional instability in the Middle East.
Mohamed also said Syria is just one of eight issues investors have to worry about:
- Will the Fed taper in September, by how much and why?
- Who will succeed Ben Bernanke at the Fed?
- Will Congress flirt with a government shutdown?
- How will lawmakers handle the debt ceiling?
- Where will Angela Merkel take European policy after her expected victory in upcoming German parliamentary elections?
- How will official creditors respond to requests additional peripheral funding and the need for further debt reduction?
- Will Prime Minister Abe come through on Japan’s “third policy arrow”?
- How will the regional implications of Syria and Egypt play out?
MrTopStep feels confident that we could add to this list, like this week’s jobs report and the two-day Fed meeting, the quadruple witching and the quarterly rebalance, but we already know about those things. I am sure there are more but this is enough to worry about for now…
September, here we come …