Why stocks drop in September — and many investors shouldn’t care

September historically hasn’t been kind to stock investors.

Since 1926, U.S. large-cap stocks have lost an average 0.9% in September, according to data from Morningstar Direct.  

September is the only month during that nearly century-long period in which investors experienced an average loss, according to Morningstar. They saw a profit in all other months.

For example, February saw a positive 0.4% return, on average. While that performance is the second-lowest among the 12 months, is still eclipses September’s by 1.3 percentage points. July reigns supreme with an average return of almost 2%.

The monthly weakness also holds true when looking just at more recent periods.

For example, the S&P 500 stock index has lost an average 1.7% in September since 2000 — the worst monthly performance by more than a percentage point, according to FactSet.

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Historically, the last two weeks of September are generally the weakest part of the month, said Abby Yoder, U.S. equity strategist at J.P Morgan Private Bank.

“Starting next week is when it would [tend to get] get a little bit more negative, in terms of seasonality,” Yoder said.

Investors holding their money in stocks for the long-term shouldn’t bail, Yoder said.

Trying to time the market is almost always a losing bet, according to financial experts. That’s because it’s impossible to know when good and bad days will occur.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, according to a Wells Fargo analysis published earlier this year.

Plus, average large-cap U.S. stock returns were positive in September for half the years since 1926, according to Morningstar. Put another way: They were only negative half of the time.

As an illustration, investors who sold out of the market in September 2010 would have foregone a 9% return that month — the best monthly performer that year, according to Morningstar.

“It’s all just random,” said Edward McQuarrie, a professor emeritus at Santa Clara University who studies historical investment returns. “Stocks are volatile.”

Similarly, investors shouldn’t necessarily accept market maxims as truisms, experts said.

For example, the popular saying “sell in May and go away” would have investors sell out of stocks in May and buy back in November. The thinking: November to April is the best rolling six-month period for stocks.

“History shows this trading theory has flaws,” wrote Fidelity Investments in April. “More often than…