09/05/2025
As we enter September, it’s worth recognizing that this month has long carried a reputation as the most volatile of the year. History shows that both U.S. and Canadian markets often struggle during this period, with September standing out as the weakest month on average. In the United States, the S&P 500 has historically delivered subpar returns during September compared to other months, a pattern often tied to seasonal rebalancing by institutions, retail investors returning after summer, and tax-planning considerations. While these factors can trigger short-term turbulence, it’s encouraging to note that October has frequently acted as a turning point, with the stretch from November through April often producing some of the strongest returns of the year.
The Canadian market reflects this same seasonal challenge. The S&P/TSX Composite Index has historically experienced average September declines of roughly –2.5%, underscoring its own vulnerability during this month. More extreme moments in Canadian market history further highlight the potential for sharp swings: during the COVID-19 panic on March 12, 2020, the TSX dropped an extraordinary 12% in a single day, its steepest decline since 1940. More recently, in September 2023, the TSX suffered its worst weekly performance of that year, losing 4.1% over just five trading days.
These patterns remind us of two important lessons. First, volatility is normal and often temporary, particularly during a month like September. Second, staying invested matters—because missing the market’s best rebound days can have a lasting impact on long-term returns. While history doesn’t predict the future, it helps us stay grounded during periods of uncertainty. With interest rates stabilizing and underlying economic resilience, we remain cautiously optimistic that the months ahead will continue to support disciplined, long-term investors.
