Since 1865, the U.S. has gone through 30 economic expansions, not counting what has happened since 2012.

Perhaps the best advice to always follow is to rely on: common sense, patience, thrift, realistic expectations, and perseverance.

There appears to be no convincing evidence why stocks have traditionally performed poorly during September. Despite this historical information compiled from 1896 through 2012, investors and advisors alike should avoid any “system” or market timing program. The reality is causation is not correlation.

Here are six positive features the U.S. enjoys:

 

[1] #1 in the world in computers connected to the Internet (505 million)

source: The World Factbook 2013-2014, CIA

 

[2] 9.8% annualized return for the S&P 500 (1926-2012)

source: Ibbotson Associates

 

[3] 19 of the world’s top 25 universities

source: World University Ranking 2012-2013, Times Higher Education

The number of bank closed by regulators due to an inability to meet their financial obligations has fallen steadily since 2009: 25 (2008), 140 (2009), 157 (2010), 92 (2011), 51 (2012), 16 (June 2013). Housing prices remain affordable, as shown by the Housing Affordability Index (source: National Association of Realtors). The Index means a family with a median annual income has enough money to qualify for a mortgage on a median-priced home (a 20% down payment).

U.S. Innovation A 2012 study by Thompson Reuters shows 47% of the top 100 worldwide innovators are from the U.S. These U.S. innovations include: the Internet, time-shifted TV, search engines, smartphone operating systems, social networking, and advanced networking technologies. The table in the article is a forecast of 2013 gross expenditures on research and development. A 2012 survey of scientists and engineers from around the world named the U.S. as the leader in research and development in eight of 10 areas of technology and technology research.

This article includes an Annualized Index Returns table based on Bloomberg data from Barclays, Citibank, JP Morgan, S&P Dow Jones Indexes, and MSCI.

According to the U.S. Department of Commerce, the typical U.S. corporation reports a 9.3 cent profit for every dollar of sales. Over the past 60 years, there have been only a few times when it has gotten higher (i.e., 10% in Q4 2011). Since 1953, the profit margin has averaged just 5.9% (< 6 cents per dollar of sales).

2013 Economic Nobel Prize Winners The 2013 Nobel prize in economics went to three Americans: Eugene Fama, Lars Peter Hansen, and Robert Shiller. The prizes were based on work which “laid the foundation for the current understanding of asset prices.” Fama’s major contribution shows markets are very efficient; work dating back to his 1965 paper, “Random Walks in Stock Market Prices.” Stock prices now move within milliseconds of earnings news. According to the Nobel committee, these three economists show “it is quite possible to foresee the broad course of (stock and bond) prices over…the next 3-5 years.”

Emerging Markets 2018 Growth Rates The IMF table below compares the average annual growth rate from 1998-2013 to the 2018 expected growth rate, as forecast by the IMF during the later part of 2013.