Commentary: September was a brutal time for investors, where are the safe havens for Singapore investors?

A BRUTAL SEPTEMBER

Markets dislike uncertainties. With the above situations remaining largely unchanged, risk assets are likely to continue to see wide swings in prices. As an example, the S&P 500 has traded from a high of 4,819 in early January this year to a low of 3,585.62 on Sep 30, a decline of 25.6 per cent.

Traditionally a rough month, September 2022 was particularly brutal.

In the last 30 years, the S&P 500 has posted average positive gains for all months except February, August, and September.

The S&P 500 was up for four straight days from Sep 7 to 12, enjoying good gains of 5.1 per cent during this period. However, on Sep 13, the index plunged 4.3 per cent in one single day due to the latest inflation data emerging from the US – the sharpest daily decline since Jun 2020. 

By the end of September, the S&P 500 had fallen in 13 out of 21 trading days, tumbling 9.3 per cent for the month. This is the S&P 500’s worst September in 20 years since the index fell 11 per cent in September 2002.

The Dow Jones Industrial Average fell 8.8 per cent in September 2022 and the Nasdaq plunged 10.5 per cent.

With inflation remaining a concern and with more hikes ahead, this will certainly add more volatility to the market, especially for risk or interest-rate dependent assets.