An old stock-market adage applies this month — how you should play it

An old stock-market adage applies this month — how you should play it

Mark Hulbert

Thu, September 3, 2026 at 11:29 PM GMT+3 3 min read

Over the next couple of weeks, the stock market will face some of the stiffest seasonal headwinds of the entire year.

I'm referring to the period between the Jewish holidays of Rosh Hashanah and Yom Kippur. The stock market's average return during this nine-day period is even worse than it is for September as a whole, and that's saying something, since September itself is far and away the worst month of the year for average stock-market return.

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The seasonal pattern around these two holidays is the source of the Wall Street adage "sell Rosh Hashanah, buy Yom Kippur." Rosh Hashanah this year begins on Sept. 11, and Yom Kippur begins on Sept. 20.

The accompanying chart illustrates how strong the seasonal headwinds are during this period. To facilitate an apples-to-apples comparison, I converted the chart's returns into daily averages. As you can see, the stock market's average daily return between these two holidays is even lower than it is during September as a whole.

The source of this holiday-related seasonal pattern appears to be below-average trading volume between Rosh Hashanah and Yom Kippur. This tendency has been recognized on Wall Street for more than a century. In September 1915, the New York Times ran an article headlined "London Market Quiet: Jewish Holiday Causes Small Attendance on the Exchange." This pattern enjoys statistical support as well: The dip in trading volume between the two holidays has been documented by a number of academic studies (such as this one).

What's different in 2026?

Doug Kass, a veteran hedge-fund manager at Seabreeze Partners, is among the advisers who for many years have paid attention to the "sell Rosh Hashanah, buy Yom Kippur" seasonal pattern. In an email earlier this week, Kass said that this year he recommends investors follow just the first half of adage: Sell on Rosh Hashanah. But rather than buying back at Yom Kippur, he said, investors should instead sell even more.

His reasoning is based on his overall bearishness on the outlook for equities. "Rising global interest rates (a function of inflation, debts and deficits), a continuation of the Iranian conflict (and its impact on producing higher oil prices), sticky inflation and slowing global economic growth ("slugflation") have recently become a toxic cocktail for U.S. stocks," he wrote, adding: "With the equity risk premium continuing a year-long contraction and valuations still above the [90th percentile], the outlook for equities remains problematic."

The bottom line? Next week, the stock market will enter a nine-day period in which it will have two seasonal strikes against it — September's negative tendency in general and the period after Rosh Hashanah. And if you're as bearish as Kass, you may want to continue underweighting equities even after Yom Kippur.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at .

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