Financial Model Blog

How to think about August & September


Depending on how you see things, Trouble or Opportunity could be lurking

A look around the corner


As the adage of sell in May goes, there is some data that shows the months of August and September could see markets slide a bit. Although history tends to repeat itself, there's isn't compelling evidence that you should liquidate half or all of your investments just before these months.


So what happens in these months? Kids are back to school, summer is over, traveling slows and it's back to business for the adults. This also marks the tail end of the third quarter and the beginning of Q4. Corporate earnings give a clearer picture of how companies and stocks should perform throughout the remainder of the year. So, let's take a look at a chart from LPL research to get a feel for what might be to come.



There's no denying the charts do have good evidence that the upcoming months could take a slight dip; especially in the post-election years. So here's how we are addressing this setup and the potential for a 5 - 10% dip.

  • Review of the current holdings

  • Take inventory of the market as a whole and momentum

  • Factor in any potential tax law changes

  • Consider earnings and sector-specific concerns

  • Avoid major cash raises

  • Adjust and make minor tweaks to ensure positioning

In a similar fashion to the way we stood up to the summer sell-off headline, we believe there is still room for the market gains to continue. There are some areas of the market that remain overvalued and we have been enjoying those gains, but it will be a time to consider taking more profits. Not to get specific on a segment of the market that looks, but don't be surprised to see additional exposure into more value stock exposure. They pay dividends, have less volatility, and are much, much cheaper than some of the red hot growth stocks.


Again, this should come as no surprise to you that we're taking a careful approach to rebalancing or tweaking of our inventory. Attempting to shift and chase areas of the market that have performed well in the past doesn't guarantee that it will continue. We continue to research, listen to earnings calls, review the research reports and make sense of it all. With the data, we integrate into our systems and make decisions that we think will prove beneficial for our clients.



We view this as an opportunity; not pain. It's a time to adjust, make changes and look forward to seeing how those changes play into your portfolio performance. The other part of the chart does show quite a bit of promise as we near the end of the year. Again, one could look at the near-term pessimism and worry about looming fears of the delta variant and an expensive market that may be running out of steam. At this point in time, we don't believe the pessimistic view is the way to position yourself or your portfolio.


And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

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Disclaimer: The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Basch Solutions to provide information on a topic that may be of interest. Basch Solutions is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Securities offered through LPL Financial, Member FINRA & SIPC. Investment advice offered through Private Advisor Group, a Registered Investment Advisor.

Private Advisor Group and Monarch Wealth Management are separate entities from LPL Financial. Access to BrokerCheck. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NY, FL, OH, TX, NC, SC, IL, AZ.