Get ready for September, the worst month for investors

TRADE SECRETS Get ready for September, the worst month for investors JON ERLICHMAN SPECIAL TO THE GLOBE AND MAIL PUBLISHED 1 HOUR AGO COMMENTS SHARE SAVE FOR LATER Listen to this article Learn more about audio Log in or create a free account to listen to this article. Greetings Trade Secrets readers! Jon Erlichman back again with your weekly Trade Secrets newsletter. We’re three weeks into The Globe and Mail’s Trade Off stock market competition and what a stretch it’s been. From Nvidia’s results to the trade war worries, there’s rarely a dull day in the markets. Was this newsletter forwarded to you? Be sure to sign up to receive the Trade Secrets newsletter in your inbox. THE LEADERBOARD Before we dive into some actionable investing insights, here’s a quick leaderboard update on the Trade Off game. THE WEEK IN MARKETS Typically, September tends to be the worst month of the year for markets. According to research from RBC, data going back to 1928 found that the S&P 500 declines on average 1.2 per cent during September. In Canada, a September slide is common. Since 1970, the S&P/TSX Composite had declined, on average, by 1.4 per cent every year over the same period. RBC says there’s no smoking gun. The bank cites what’s called window dressing. That’s when investment funds tidy up their portfolios near the end of a fiscal year. Tax-loss selling also plays a role. The report also cites the self-fulfilling prophecy of September: that, because it’s known as a weaker month, it just becomes a seasonal trend. What does the trade war mean for stocks? If your picks have been whipsawed by the headlines, you’re not alone. Canadian steel companies, auto parts manufacturers, lumber players and Canada Goose are all examples of stocks that were initially dragged down by the trade war news. That said, it’s been tough to derail Canada’s stock market. Scotiabank strategist Hugo Ste-Marie reiterated that in a note to clients last week. “If oil, gold and copper prices remain elevated, they should continue to support the TSX,” he added. Add to that Canadian banks, many which displayed strong profit power in their latest earnings. Luxury stocks beat to their own drum: On our most recent episode of Ticker Take, we spoke with Markus Hansen, portfolio manager with Vontobel. He invests in the world’s most exclusive brands for a living. Typically, companies aim to maximize sales. In luxury, the top players hold back on supply to retain pricing power. Hansen likes…