by Gary Alexander
September 1, 2026
Today marks the first day of a dreaded month in market history. For a century, since 1928, September has been the worst month by far, and the only month with a net negative track record, retreating 1% on average.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
But wait. What about lately? In September 2025, the S&P 500 was up 3.53%, and the year before it was up 2%. August is also supposed to be a weak month, but this year we saw 2% gains in the Dow, +3% in the S&P 500 and +4% in NASDAQ (through last Friday). A familiar disclaimer comes to mind: “The past is no guarantee of the future,” and I would add, “a more common outcome is a ‘reversion to the mean.’”
I’m still a big fan of the 4-year Presidential cycle providing strong clues about the market’s direction, since that cycle is based on human nature in the real world, but I’m no fan of most other calendar clues, especially silly stuff like the Super Bowl Index, January Effect, hemlines, or Triple Crown winners. My basic beef is that creating a past trend from the rearview mirror is a study in coincidences or retro-fitting, not logical analysis. Those who bet on the past repeating itself forget that each new situation is truly new.
A coin flip coming up heads 10-times in a row doesn’t imply the next flip will be heads, or that “tails are due.” The next flip will always be a 50-50 wager, no matter what happened in the past 10 or 50 flips.
Some of the brainiest minds in our business can’t seem to figure that out. From the Nobel-winning team behind Long-Term Capital Management (LTCM) in 1998 to the more recent celebrated Wunderkinds, like Sam Bankman-Fried (FTX) or Leopold Aschenbrenner (Situational Awareness), trading on high leverage based on past trading ranges is a fool’s errand, as those past trading bands beg to be broken!
The Heisenberg Uncertainty Principle says we cannot simultaneously measure certain pairs of physical properties with infinite precision. More specifically, it says the observer tends to change the outcome.
In this regard, I would present my own hypothesis here – which I test every year – the Alexander Beat the Crash Calendar Rush, in which investors scarred by past October scares tend to sell in September to avoid the next crash, making September the market’s worst month. And now that September is the worst month, investors tend to sell in August – and now in July. This year, in fact, June and July were marginally down.
Investors no longer “sell in May and go away,” since that theory hasn’t worked lately, but perhaps they sell in June (“a bit too Soon”) or in July (“but don’t ask Why”) to avoid sell-offs in August or September.
Binary Thinking (As In “Sell All Stocks”) Is Usually a Huge Blunder
Worse than selling (or not buying) based on calendar months is the mistake of selling all – or the vast majority – of your stocks based on outdated math or an army of Cassandras forecasting a coming crash.
I have some experience in this arena. Thirty years ago, in July 1996, I was editing four financial letters at a major publishing firm. Most of our professional analysts were bullish then, including my four, but one was a “binary” thinker. I won’t name that analyst, but let’s call him “Gene,” as in a Genie’s magic lamp.
In late July 1996, Gene issued a much heralded “sell signal.” In fact, Gene issued a total of eight-sell (and eight-buy) signals from 1980 to 2010. Most worked out fine, but 1996 didn’t, as the market soon soared.
Even if these sell signals are all correct, I wouldn’t necessarily follow any of them. Putting aside the headache of paying capital gains tax and guessing how or when to jump back in, you sell on weak bids.
I was on the front line of that 1996 sell signal, fielding hundreds of subscriber calls, faxes and even office visits every day after that sell signal. While my other three-editors were still bullish, I had to defend this one-bear. Whose side should I take? These are the real-world problems when making major sell signals.
The same was true of Alan Greenspan’s famous “irrational exuberance” speech on December 5, 1996. He single-handedly spooked the market near the start of its greatest 5-year growth span over the last century.
As you can see, the market took off like an Elon Musk SpaceX rocket following Greenspan’s speech:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
In early 1995, one of my other editors was boldly predicting 7,000 Dow in 1997, and it turns out he was way low, with the Dow reaching 8,000. I aligned mostly with his view, so I didn’t sell all (or any) of my stocks in 1996, and I’m truly sorry for those who sold out and missed most of the next year’s 50% gains.
Here are the real gains after Gene’s July 23 sell signal, and Greenspan’s market-chilling December talk:
What Happens When Investors Panic and “Sell All Stocks”?
This story reminds me of the dog chasing a school bus down the street. What will he do if his teeth are buried in a turning wheel? Selling in a panic is like biting into a turning wheel. When an investor “sells all stocks” into a panic situation, bids are low and you sell at a short-term loss, while paying capital gain tax, an insult and an injury, I’d say. You tend not to get a fair bid on your stocks if you sell into a panic.
Taxes on capital gains are not indexed to inflation, and that is a major impediment to selling big winners, so I have gradually transferred my taxable stocks to create a retirement account and take out the minimum required distributions and pay ordinary income on the total sum, rather than computing past capital gains.
As a result, I only have one-stock left in my taxable account: Taiwan Semiconductor (TSM). It’s now a 40-bagger for me, as I bought it over 20-years ago, after the technology stock collapse in 2000 to 2022, when its adjusted price was in single-digits. It’s now over $400 a share, so capital gains taxes would be quite large.
In this regard, I want to cite a paragraph from Louis Navellier’s column this week, which parallels my feelings about selling my sole remaining taxable stock (I hold over 25 still in my retirement accounts):
Louis writes: “In case you wonder why I am so careful before I sell any stocks, I would incur 23.8% in long-term capital gain taxes (including the 3.8% Obamacare tax above $250,000) in federal tax-free states like Alaska, Floridia, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Even worse, clients in California could incur 37.1% in long-term capital gain taxes (including the surcharge).”
Then, Louis adds: “I believe the key to success in America is to identify great companies and ride them as long as they are scoring highly in my 8-factor Fundamental model. That is why I never sold Super Micro Computer, despite relentless short seller attacks,” and that’s why I haven’t sold TSM. Instead, I am hoping for some capital gains tax reform, indexing gains to inflation, so that we only pay taxes on the real gains, not the phantom inflationary component. This would help homeowners and business owners as well as investors, and it seems like a financially honest way to compute capital gains.
The Capital Gains Inflation Relief Act of 2025 (S. 798), introduced by Senator Ted Cruz, would allow individuals to adjust their cost basis of certain assets — including common stock, tangible property, and digital assets — for inflation (as measured by the PCE index) if held for more than three years.
Until a bill like this becomes law, I’m holding TSM as my last fully taxable stock holding, betting on the fact China would never invade Taiwan and take over or destroy Taiwan’s massive semiconductor market.
Navellier & Associates; own Taiwan Semiconductor (TSM) and Super Micro Computer (SMCI) in managed accounts. Gary Alexander owns Taiwan Semiconductor (TSM) personally but does not own Super Micro Computer (SMCI) personally.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
What to Expect from Mid-Term Elections (and Trump’s Trade Wars)
Income Mail by Bryan Perry
The Amazing Stock Buyback Phenomenon Continues
Growth Mail by Gary Alexander
The Perils of Market Seasonality (or “Selling All Stocks”)
Global Mail by Ivan Martchev
Why U.S. Investors Should Care About EU Natural Gas Prices
Sector Spotlight by Jason Bodner
AI (Like the Transistor, PCs and Internet) Will Change Everything
View Full Archive
Read Past Issues Here
About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20-years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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