Image source: Pixabay

In today's issue of the One-Minute Market Report, I examine the damage done in September and highlight the parts of the market that were hit the hardest. I begin with the returns for the major asset classes, and then I work my way down through sectors, equity groups, and individual winners and losers for September.

Major Asset Class Performance

Here is a look at the performance of the major asset classes for the month of September and year-to-date. Asian markets continue to struggle this year, thanks in large part to the weak China market. The only asset class showing positive performance is volatility.

S&P 500 Monthly Returns

September was the worst month of the year, and the worst month since the Pandemic crash in March 2020.

S&P 500 Drawdowns 

It has been a bumpy ride down this year, with six failed rally attempts. We are now 25.3% below the high water mark of Jan. 3, 2022.

September Statistics

Here is a look at the statistics for September and year-to-date. In September, for every stock that was up, there were 13 that were down. This is close to an all-time record. 

78% of all stocks in the S&P 1500 Composite Index are now in a bear market, with the median stock down -33.1% from its 52-week high. More than 85% of all stocks in the index are trading below their 200-day moving averages. 

Equity Sector Performance

For this report I use the expanded sectors as published by Zacks. They use 16 sectors rather than the standard 11. I find that using all 16 gives a fuller picture of which areas of the market are attracting the most buying and selling interest from investors.

Equity Group Performance

For the groups, I separate the stocks in the S&P 1500 Composite Index by shared characteristics like growth, value, size, cyclical, defensive, and domestic vs. foreign. The top 7 stocks by market cap (big tech names, like Apple, Microsoft, Alphabet) are by far the worst performing equity group year-to-date. 

September's 10 Best Performing Stocks

The 10 Worst Performing Stocks Today

Final Thoughts

After an impressive and hope-inspiring 17.4% rally from June 16 to Aug. 16, the market has given it all back and then some. We have wiped out all of the gains from last year and a significant chunk of the gains from 2020. This raises an important question for investors - how many times do you want to earn the same dollar? 

For a by-the-book, buy & hold investor, the answer is 95% of the time. By that I mean that the only time actual wealth is created is when the market makes a new, all-time high. New high days happen only 5% of the time spent in the market. The other 95% of market days are spent backing and filling. 

I'm all for buy & hold, but I also believe in having a contingency plan. Investing shouldn't be just about playing offense by staying 100% long all of the time. There is a time to play defense, as long as it's done rationally and methodically.

One of the best ways to play defense is by gradually reducing your risk exposure as the risk of recession increases. The index of leading economic indicators is a good place to start. You can learn how this index works by visiting the Conference Board's website here.

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