After almost 1,000 years, the Bayeux Tapestry is back in the UK for the first time since it was made. It will go on public display this week at the British Museum.  

It’s proving a sensation with history lovers. Tens of thousands of people queued for hours online to snap up the first allocation of tickets on the day they went on sale. Tickets sold out, generating more than £2.5m of revenue in one day, a new record for the museum.  

The 70-metre-long tapestry depicts the events leading up to the Norman Conquest of England in 1066. Spanning 58 individual scenes, it gives a broad picture of the build-up to the invasion and provides important context for the Battle of Hastings.

Why does this matter to investors? Because it shows the value of seeing the whole picture, not just focusing on a single chapter in the story.

Our chart this week makes a similar point. It shows the average monthly returns from the US S&P 500 stock market index since 1950. One month, September, stands out. It has a reputation among investors as the weakest month for stocks, and this is borne out by the historical data, which shows an average September return of -0.72%.

Investors offer many explanations for this historical pattern, such as managers returning from summer holidays and rebalancing their portfolios, and US mutual funds selling assets as they prepare for the end of their fiscal year in October.

Of course, many Septembers have produced positive returns, while others have been flat, and this isn’t a forecast of what will happen this month or in the future.

The key point stands though, and that’s the importance of seeing the wider picture. Judged in isolation, September’s returns look unimpressive. But looking at the full picture shows that, based on historical averages, most months have provided a positive return, helping investors grow their wealth over time.

This demonstrates why it’s rarely a good idea to make a snap decision based on a single piece of data. It also highlights the risks posed by attempting to ‘time the market’. Few investors manage to do this successfully. If they sell during a dip to try to avoid further falls, they run the risk of missing out if stocks swiftly rebound.

Key takeaway

The Bayeux Tapestry in its entirety tells a much fuller story than any of its individual scenes. Similarly, successful investors understand that looking at the wider stock market picture is far more informative than focusing on a single month in isolation. This helps them resist the temptation to react to short-term bumps. They know that weaving an effective investment strategy means remaining focused on the long term.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.