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Apple Stock: Rough September Can Be Great For October Returns

In September 2021, Apple stock performed very poorly. However, seasonality trends and a potential rebound mean that October could be a much better month for AAPL investors.

First, let me make one thing clear: coincidences happen all the time in the markets. Even so, I still find it relevant to look at price behavior to try and understand how a certain stock may perform in the near term.

Take Apple stock  (AAPL) - Get Apple Inc. (AAPL) Report, for example. Shares dipped nearly 7% in September, the worst monthly performance since February 2021, and the second worst since September of last year. Could the selloff mean that now might be a good time to buy and hold AAPL on weakness?

iPhone 13

Figure 1: The new iPhone 13.

(Read more from the Apple Maven: 3 Reasons To Buy Apple Stock This Week)

September vs. October returns

The chart below shows how Apple stock has performed over the past 20 years. The bars represent the median returns for (1) all months, (2) September only and (3) October only.

The first thing that stands out is how much better October tends to be for Apple shares. The median return for the month that has just started has been a whopping 7.2%, a solid 3 percentage points higher than the median of any given month. Compared to September, October’s outperformance has been even more impressive: about 8 percentage points better.

Figure 2: Apple stock median returns over past 20 years.

Figure 2: Apple stock median returns over past 20 years.

The data matches the narrative that September tends to be a sell-the-news month for Apple stock. This is true because Apple consistently unveils its newest iPhone late in the summer – and the company’s shares frequently dip shortly after the announcement. October has often been a rebound month.

The last bar chart above shows that the median return in October have been even better, although only slightly so, when September is a negative month for Apple shares. Once again, the historical data serves as encouragement for those thinking about buying AAPL at current levels of around $140.

(Read more from the Apple Maven: Apple Stock: The “Trick” That Can Push Share Price Higher)

The buy-the-dip strategy

Apple stock is about to enter correction territory, if one defines it as a 10% pullback from an all-time high. The midday price is nearly 11% lower than the September 7 price of almost $157. Earlier this year, I explained that buying Apple on dips has been the best long-term strategy. The deeper the hole, the better the buying opportunity, as the chart below depicts.

Figure 3: Average one-year return on AAPL, by strategy.

Figure 3: Average one-year return on AAPL, by strategy.

This time, the decline has been perhaps a bit too modest for bargain hunters to jump in headfirst. Still, the combination of a pullback plus the start of a historically strong October suggests that investors might want to do some homework on AAPL, and maybe consider buying some shares here.

Twitter speaks

A few days ago, when Apple stock was worth nearly $142 apiece, I asked Twitter for a plan of action: should investors buy more shares, hold what they have, or dump them? See poll below. Feel free to chime in and follow us on Twitter.

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)