Augustus is usually a fairly sleepy month to act, because various institutional investors try to enjoy some remains of the summer heat. However, when it is a back-to-school season, it is certainly back to the trade, while investors return to the hot chair and want to continue where they had left for the sizzling summer months.
As trading volumes increase, the volatility is also possible. And if traders want to sell after a burning hot summer for the technical sector, there may be a correction in the maps. Indeed, historical sale were hit in September. But before you sell all your shares before August, you must know that it is unwise to make investment decisions (especially large) on the basis of something that is completely random and separate from the foundations. Personally, I think it makes little sense to sell shares because people fear a certain month.
Not every September is someone to remember! Yet I think investors should be prepared for an increase in volatility and volume. Whether that is ready for the tides or prepare to put new money to work (keeping the powder dry for bargains), it pays to be ready for what the market throws towards you. September could certainly seem like a cooling of Momentum or even a kind of panic. But it is nothing that you, a disciplined long -term investor, cannot handle!
What should investors do pending the effect of September?
September gets a bad rap in markets. It is not exactly a month that traders are looking forward to, especially if an increase in trade volumes strengthens movements in both directions.
Since the shares tend to bring the lift down and up the stairs, I would claim that a sudden increase in volatility could be the most frightening for those new investors who are very used to the calm waters of Augustus. Indeed, how often have we seen the broad market indications end up with a one -day flat? Indeed, a steady movement that can be replaced a higher week after week by more chopiness. And with that, investors must be ready for everything like September, a month that many fears through.
Although it is to balance again and running the risk for the month might be good if you notice that you are not ready for a return of volatility, I think most investors would be fine with not doing anything. If you are on track, you are diversified and you have cash to buy the dips, you are already ready for September and the potential September effect. As such, treating the month is the most logical as every other month.
The big question that investors should ask is what is for sale to go in September? At the moment I view shares of Restaurant Brands International (TSX: QSR) As a deep undervalued and less chance of slipping if the markets were in a hangover in September. Nowadays shares go 13 times forward price to income (p/e) to use a dividend yield of 3.8%. Of course, the last quarter (Q2) was not good, with profit disappointing and weighing the costs.
But in the longer term I love the brands and their growth potential, especially because consumers crave value. For investors, QSR shares for September is on the Valenu, while Bay Street lowers the stock about that weak number. On the positive side, management hinted that better times can get ahead, because the prices seem to normalize. Is there room for improvement in the end of the year? Certainly. But with a low bar I think QSR is ready to impress, even if the rest of the market is not ready until September.
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