There are many forces that act on the movement of the markets and among these the seasonal cyclical component must also be considered. We remember it today, at the beginning of August, a month which is seasonally among the weakest of the year.
This seasonality, with modest modifications, is rather transversal and involves practically all world markets. August is on average one of the worst months, preceded only by May, which after all gave its name to the famous motto "sell in May and go away".
The American S&P 500 index (-1,56% on average for the months of August 2010-2014 and -0,09% in 2005-2014) does not differ much from the world average (-1,84% in 2010-2014 and -0,42% in 2005-2014).
In the Far East, the most significant market is the Japanese one. Despite some differences, the month of August is confirmed as weak here too (-3,61% in 2010-2014 and -1,42% in 2005-2014), even almost on the same level as May (-4,37% in 2010 -2014 and -1,38% in 2005-2014).
The common denominator of the indices at all latitudes is therefore a certain weakness in August. This justifies the prudence with which savers normally approach this month, postponing more demanding investments until after the holidays.
