Some Stock Strategists Brace for September Swoon; Money Managers Expect Investors to Get Jittery Over Fed's Interest-Rate Plans
For stocks, September can be the cruelest month.</br></br>The big crashes of 1929 and 1987 came in October, but on average, October shows gains over the past 20, 50 and 100 years. The only month that shows an average decline in all three periods is September.</br></br>Money managers debate why that is. It could be that people sit down after Labor Day and re-evaluate their portfolios. Regardless, the arrival of September is making some people nervous now. Even some who feel bullish for the long run are warning clients to beware of September.</br></br>"I am a little worried," said James Paulsen, chief investment strategist at Wells Capital Management, which oversees $345 billion. Mr. Paulsen has been one of the business's most relentless stock bulls for years, but now he says U.S. stocks could fall as much as 15% some time this autumn. He is urging clients to shift some money into foreign stocks, which as a whole are less expensive than U.S. stocks.</br></br>Mr. Paulsen emphasizes that he doesn't think the bull market is over; it could run another five years, he said. "But bull markets aren't typically straight-line events," he said. A 15% decline would be less than the 20% drop that typically defines a bear market, but would certainly be enough to rattle investors.