Sam Dickie: Fisher Funds expert on equity markets taking a turn for September

Equity markets have taken a turn this September, and it's prompted concerns among experts.

Markets are softening a bit, which is a remarkably regular occurrence in September. 

Sam Dickie from Fisher Funds reveals what's going on.

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Episode Transcript

Speaker 1 (00:00):
Now equity markets are making investors very nervous. This September
markets are softening a bit, which is remarkably, remarkably regular
regular occurrence actually in September, and Sam Dickey from Fisher
Funds is with us, say Sam.

Speaker 2 (00:12):
Hey have that. So what goes on in September, it
is quite astonishing. So if you go back sort of
twenty thirty or even one hundred years, September is by
far the weakest month in the US equity market. In fact,
over the last one hundred years, it is the only
month that is on average negative and the reasons are
actually pretty benign. So Northern Hemisphere money managers, so July

(00:34):
is the by far the strongest month of the year
on average, So when they go away on holiday, liquidity
drives up a bit and stock markets typically squeeze a
bit higher, and they come back from the summer break
all refreshed and look to clean up their portfolios. And
many of these guys have September year end, so they
clean out losers from their portfolio to tiding the mup
make them look good at September year end, driving down

(00:55):
stock prices, and part of it's probably self fulfilling, which
which seems silly, but investors sell to try and get
ahead of the September swoon, which brings on the September swoon.
But this year's weakness isn't just about this calendar superstition.
There are there are some real risks brewing that have
investors a little concerned, like what, well, first, sentiment is elevated.

(01:17):
So remember a few short months ago you and I
were talking about fear being the highest in twenty five years.
Now the market is quite exuberant, which worries professional investors.
So that's why number two is markets are headline expensive.
So the price to earnings multiple, the PE ratio is
twenty two times earnings, which is pretty much the highest

(01:38):
level in quarter of a century. And the next six
months should be tougher economically as the rubber meets the
road on inflation and growth from tariff. So Home Depot
put it most succinctly last week, it, like many other
US companies, have been been swallowing, been eating the tariff
cofts in pots, imposts and the in their profit and

(02:00):
loss statements to date as they wait and see where
terrafs will land. But the Home Depot said they'll look
to pass on these cost increases to consumers in the
second half, which will lift inflation and truncate growth. And
of course, the AI bubble is looking pretty inflated right now,
and the enthusiasm for AI stocks is just not being
matched by reality. It's not being matched by the revenue

(02:23):
use cases from real world use cases.

Speaker 1 (02:26):
So what does this all mean for investors?

Speaker 2 (02:29):
I think these are valid concerns. Not the September swiming,
by the way, not that superstitious thing, but I think
these are valid concerns, especially given how far the market
has moved. A couple of caveats, so the first one
is unlike in late twenty twenty one, twenty twenty two
when we last saw that sort of headline pe multiple
up at that twenty two times and we saw a

(02:52):
big pullback of markets. The US Federal Reserve, the FED
has a ton of firepower this time to cut rates
of the economy soften. So remember back then, the Federal
Reserve benchmark rate, which it uses to stoke or slow
down the economy was already near zero's whereas today it's
at four and a half percent, So tons of room
to cut rates to CUSHNERI economic weakness.

Speaker 1 (03:14):
Yeah, brilliant stuff.

Speaker 2 (03:14):
Sam.

Speaker 1 (03:15):
It's good to talk to you. It always is. We
talk to you in a week's time. Sam Dickey Official
fundzet

Speaker 2 (03:19):
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