It's Very Volatile and May Only Get Worse...
August 2, 2026
The month of August has begun…not that you needed me to tell you that. Kind of a melancholy month for me…still really mid-summer but the days will grow shorter, the crickets will become more apparent signaling the coming of fall and eventually cooler weather. Though generally cooler, I prefer June.
Why are we talking calendars? Because August is a month that has generally been one of less robust returns for investors. Over the past century (well 98 years to be precise and thanks to Fisher Investments for this data) the markets have been down more than 5% in August in more years than any other month except September. Also, only four months have worse average returns.
August is vacation month, a time when many take time off, traders and investors alike. Typically, trading volumes are lower. It takes less activity to move the market. Unexpected news events can result in greater than usual market moves. As it is, markets have already been characterized by unprecedentedly large swings – both up and down. After reporting excellent earnings on Wednesday, Microsoft added nearly half a trillion dollars in value – more in one day than any other company ever. By contrast, on June 30th, Intel’s stock reached a price of $142/share. Despite reporting much improved results, today the shares are valued at $90, the company shedding over $200 billion in value...in a month! Very unnerving for investors.
These conditions have existed for some months now, dramatic single stock moves up and down, often overreactions to data that is not exactly as expected. Even outsized moves in ETF’s and interest rates. Stock gains soar…and evaporate. A thrilling time for speculators, less so for investors. Earnings are strong yet valuations remain high, extended even. It feels like the risks are more to the downside, a correction overdue. Trimming successful positions that have grown to a large percentage of the portfolio wouldn’t be a bad idea. Hoard some cash to have dry powder if opportunities arise in a correction. Check in with your advisor, review your holdings. Discuss booking some losses, harvesting some gains. As I have written before, it is your money…pay some attention to it.
OK, enough of the cautions. It is full on summer now in North America so the link below should be of interest to all. There is a new kid on the block…or rather a new block on the market. Long available in Europe, the US has finally approved a new sunblock ingredient that is more efficacious and helpful than what was previously allowed by the FDA. Good news in a one-page, easily read story from Science News. Something to look for on the shelves that will keep you looking more youthful for longer and much better protected from the sun. What's not to like?