September stock blues

The September Effect refers to the stock market’s historical underperformance during the month. It has been Wall Street’s worst-performing month since 1950. Several theories exist to explain this historical pattern. One posits that traders, returning to work from summer vacations, rebalance portfolios in September, increasing selling volume and putting pressure on stock prices. Another theory suggests that bond offerings pick up in September as summer vacations wind down; those bond sales attract money that would otherwise have supported stock prices. Still, another blames mutual funds, whose fiscal years typically end on October 31. Funds, the theory suggests, close out losing positions in the last months of their fiscal year for tax purposes. This year, investors concerned about September may be even more anxious due to the elephant (and donkey) in the room: the upcoming presidential election. Uncertainty about its outcome could hang over stocks for the next two months.

(Adapted from “September Is The Worst Month For Stocks. But Should You Sell?” by Colin Laidley, published on September 3, 2024, by Investopedia)

Bots and Oasis tickets

Bots and dynamic pricing, a match made in hell. Fans trying to buy tickets of the newly united band Oasis through online ticketing sites found long waits, seemingly hard-to-swallow fees, error messages, bots, and reportedly error messages claiming that fans themselves were the bots. Not all of the inflated ticket prices were the result of bots, however. After waiting hours in the queue, some fans reached the front only to find the price of tickets had more than doubled. This was due to dynamic pricing. This online ticketing “fiasco” for the band’s upcoming reunion has led to pushback against dynamic pricing models and calls for more consumer protections. The UK culture secretary Lisa Nandy has confirmed that the British government will look into dynamic pricing as part of a planned review. The review will investigate “issues around the transparency and use of dynamic pricing, including the technology around queuing systems which incentivise it.”

(Adapted from “Ticket Bots Leave Oasis Fans Enraged,” by Angela Watercutter, published on September 2, 2024, by Wired)

Highlighting achievements

Workhorses are the ones picking up the slack when teammates fall short, the ones the boss calls when she needs something done fast, or last minute, or after hours. And still we aren’t the stars. Putting in effort is a given if you want that raise or promotion. But anyone can grind it out, researchers say — that’s just a matter of sacrificing your life. To get that next job or big, high-profile project, you have to be known for more than long hours. You have to change how your colleagues and bosses see you. The next time a colleague stops to chitchat in the hallway or asks how you are, don’t say “fine” or “busy,”. Share your most recent win and its impact — this project is going to save us $3m a year, or that client just reupped their contract because they were blown away by our proposal. Imagine how effective you could be if you paired your hard work with a dose of self-promotion.

(Adapted from “Why The Reliable Office Workhorse Rarely Gets Ahead,” by Rachel Feintzeig, published on August 10, 2024, by The Wall Street Journal)

Go for gold

Investors should “go for gold” as the precious metal’s stellar run isn’t over, Goldman Sachs analysts said in a recent research note. Purchases by central banks, which hit a record in the first quarter of 2024, have been one of the biggest drivers of the precious metal’s rise this year. Bank of American analysts estimate gold has now surpassed the euro to become the world’s largest reserve asset, second only to the US dollar. Geopolitical risks such as the Israel-Hamas war and Russia-Ukraine conflict, as well as signals from the Federal Reserve of a September rate cut amid signs of a slowing labour market, have also buoyed prices. Global physically backed gold ETFs have now seen inflows three months in a row as Western investors pile into gold, with North American activity outpacing Europe and Asia in July, according to the latest World Gold Council data.

(Adapted from “Investors Should ’Go For Gold’ As Fed Rate Cut Looms Goldman Says”, by Ines Ferre, published on September 4, 2024, by Yahoo! Finance)

Published in Dawn, The Business and Finance Weekly, September 9th, 2024