Tapering in September could make a historically rough month for stocks even worse. September is the worst month of the year for S&P 500, Dow Jones Industrial Average, Nasdaq Composite and Russell 1000. Since 1950, the Dow’s average September loss is nearly 1%, more than double the average loss in June, the next worst month for the blue-chip index.
There is some hope for the Dow remaining durable if confirmed tapering causes Treasury yields to further rise. The SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA), the Dow tracking ETF, allocates almost 34% of its weight to industrial and discretionary names. Discretionary and industrials, in that order, are the two top-performing sectors in rising rate environments.
SPDR Dow Jones Industrial Average ETF
ETF Trends editorial team contributed to this article.