Some consider August the month of anticipation—a new school year is about to start, football season is getting underway, and the leaves will soon start falling from the trees.
But August also has a more unsettling side.
On Wall Street, the month of August is known for surprises—and not in a good way! As you can see from the accompanying chart, investors are often asked to manage through some shock headlines during that month.1
However before you go thinking about making a change, here are a few reminders to keep in mind during the month of August.
- The Cost of Missing the Market’s Best Days. Left untouched, a $10,000 investment in the Standard & Poor’s 500 stock index would have increased to $71,750 during the 20-year period that ended December 31, 2024. It would have increased to only $32,871 had you missed the 10 best days. You never know when one of those best days will happen.2
- Market Timing Requires that You Are Right. Twice. When you attempt to time the market, you have to be correct not only in predicting the downturn but also in anticipating when to re-enter the market. So, you have to be right. Twice. Remember the expression, “It’s about time in the market, not market timing.”
- “Sell in May and Go Away” Hasn’t Worked in Years. Some Wall Street maxims provide insights into the world of investing, but some others should be approached with a bit of skepticism. “Sell in May” suggests that investors go to the sidelines starting on May 1 and remain out of the market during the summer months. However, the month of May has posted gains in 9 of the last 10 years, including a 6% increase in 2025. Heading to the sidelines during the month of August may prove to be a questionable strategy.3,4
- When Should Changes be Made to Your Portfolio? Most often, changes in your life might warrant an adjustment to your portfolio—if you want to pursue a new financial goal, for example. Or if your timeline for another goal has accelerated or slowed down. We’d want to review those types of changes with you and see if an adjustment is needed.
Will we see a shock headline in August this year? Who knows? But we’re prepared for whatever news events get thrown our way.
- Finance.Yahoo.com, May 30, 2025
- CNBC.com, April 7, 2025
- AmericanCentury.com, May 9, 2025
- Stocks are represented by the S&P 500 Composite Index, an unmanaged index that is considered representative of the overall U.S. stock market. Past performance does not guarantee future results. Individuals cannot invest directly in an index.
