Stephen Eckett

August has historically been a poor month for stock markets

The UK equity market has displayed rather irregular behaviour in August since 2011, alternating mildly positive returns for the month in even years with large negative returns in odd years. However, that pattern broke down in 2017, when the market delivered a small return (0.7 per cent) in an odd year.

Besides the odd pattern, except in the anomalous years of 2008 and 2009, since 2000, even when the market does rise in August, the returns are small, as can be seen in the chart.

Stock markets historically have seen steep declines in June

A quick glance at the chart below shows that June is not usually a good month for equities. The chart shows the month’s returns from the FTSE All-Share index from 1984; one can easily see the market falls more often than it rises in June. And when the market does decline, the falls can be quite large, whereas the positive returns are usually only modest.