“Come back on St Leger Day”: Should you buy in September?

For a bunch of people who base most of their decisions on mathematical ratios, company accounts and economic forecasts, investors can be a surprisingly superstitious bunch.

You have probably heard the old saying about selling in May before returning to the market on St Leger Day – a horse racing festival which takes place over four days in September.

As with most superstitions, it is part nonsense and part half-truth. Selling in May this year would have been a bad call, for example, with markets rallying strongly in the aftermath of April’s ‘Liberation Day’ sell-off.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Both the FTSE 100 and the FTSE All-Share have risen by around 8.6% since 30 April, as of yesterday’s market close (8 September). The S&P 500 is up 16.6%. The Euro Stoxx 50 has posted more modest gains, but is still up 3.9% over this period.

That said, historical data does suggest that, on average, markets tend to perform better in the first and last four months of the year, with a period of less promising performance in between.

Data from investment platform AJ Bell, focused on the broad-based FTSE All-Share Index since 1965, shows the average capital return of the UK stock market has been 6.1% between 1 January and 30 April. Between 11 September (St Leger Day) and 31 December, it has been 2.2%. The in-between period has been a more paltry 0.2%.

One possible explanation is that there is less trading activity during this middle period, as fund managers swap the office for the beach. The drop in liquidity could create greater price volatility.

How often has ‘Buy in September’ worked?

Sometimes just one or two parts of the pattern hold up. Based on AJ Bell’s UK-focused data, it has only worked perfectly around 27% of the time over the past 60 years.

“The FTSE All-Share has risen through to the end of April, dropped through to mid-September and then gained until the end of a year on just 16 occasions since 1965,” said Russ Mould, investment director at AJ Bell.

That said, there does seem to be some element of truth in it when you look at each period in isolation. If you look at every year going back to 1965, there have been 43 years where markets have risen between January and April, and 42 where they have risen between September and December. By comparison, there have been just 32 years where they have risen between May and September.

^{Source: AJ Bell and LSEG Refinitiv data. Data as of market close on 5 September.}

Within these periods, some months have tended to be better or worse than others. September is sometimes highlighted as a volatile month, despite falling in one of the more buoyant thirds of the year.

For example, if you look at the average monthly change in the FTSE 100 since 1984, when the index launched, September is the worst month, according to AJ Bell.

Tom Stevenson, an investment director at Fidelity International, notes a similar trend in the US. He writes: “According to Bank of America, the S&P 500 has fallen 56% of the time in September. In the first year of a presidency, the odds are slightly worse, and the average fall is slightly greater.”

This throws a bit of a spanner in the works for the superstitious investor. Should they heed warnings about the “September effect”, listen to the old adage about buying on St Leger Day, or (ideally) take both of these old wives’ tales with a pinch of salt and adopt a sensible long-term approach?

Should you buy in September?

While it is possible to identify broad seasonal patterns, investors should block out short-term noise and focus on long-term fundamentals.

Remember that successful long-term investing is more about time in the market than timing the market. Trading in and out of holdings comes with unnecessary costs and means you miss out on the opportunity for potential growth, with your cash simply sitting on the sidelines.

Earlier this year (May 2025), Fidelity International analysed the UK market’s performance over the past 15 years, based on the FTSE All-Share Index. It found that missing the best 10 days of market performance knocked roughly a third off investors’ annualised returns, taking them from 7.7% to 4.7%.

Missing the best 20 days of market performance knocked more than two-thirds off annualised performance, reducing it to 2.6%. Meanwhile, missing the 40 best days left investors in the red, with annualised losses of more than 1%.

The thing with investing is you never know when the best days are going to take place. They often come shortly after a sell-off, as we saw in the wake of the ‘Liberation Day’ crash. Remaining invested over the long run is generally a better strategy than selling out and holding large piles of cash.

Although equity markets can be volatile, data from Barclays looking back over the past 120 years shows that equities have outperformed cash 70% of the time, based on a two-year holding period. If you extend the holding period to 10 years, it rises to 91% of the time.