History tells us that February is a terrible month for the stock market. Here’s how it’s shaping up (and what investors can do about it).

February is great for romance, but it stinks for the stock market. Or so history says.

But is that really the case? this year? Let’s take a look at how things are shaping up and what investors want to do about it.

Image source: Getty Images.

February is the second worst month for the stock market

When evaluating stock market performance, we typically look at benchmark indices. S&P 500 (^GSPC 0.03%). For the index, February is the second-worst month on average, behind only September, which has the lowest average monthly return over the past 100 years.

For other indices, technology-focused Nasdaq Composite (^IXIC -0.28%)February actually topped the list of worst months since 2000. And considering how hot the tech sector has been during the current bull market, many investors may be more interested in the index’s performance.

In any case, so far this year, February certainly doesn’t seem to be behind. The S&P 500 index rose 3.8% and the Nasdaq composite index rose 4.4%.

^SPX data from YCharts

Additionally, some individual stocks surged even more in February. for example, nvidia rose by 27%, super micro computer It rose 49%.

To be fair, it hasn’t been all smooth sailing for all stocks in the market. Rivianan electric vehicle (EV) manufacturer, fell 32%, and its social media stock price fell 32%. snap It fell 33%.

SMCI data from YCharts

Clearly, we can see some trends that only emerge from the big winners and losers.

Artificial intelligence (AI) and the physical components behind it are still hot. Nvidia, which designs graphics processing units (GPUs) used to train advanced AI models, has released another stellar earnings report. Super Micro Computer, which manufactures server racks equipped with cutting-edge AI chips, also announced fantastic results.

Meanwhile, Rivian is reducing its workforce to increase profitability or somehow reduce its losses. Meanwhile, Snapchat owner Snap saw a year of stock market gains wiped out after it released a very disappointing quarterly earnings report.

Lesson: Keep investing.

Good month or not, February, like all other months, provides an excellent opportunity to invest money in the stock market. Because that’s the best way to invest. Periodically.

Strategies such as dollar cost averaging or automatic investment plan It can help by removing psychological barriers to investing. For example, some investors find it difficult to invest new money when the stock market is hitting new highs like it is right now. On the other hand, some people feel uncomfortable investing during a stock market correction or bear market.

By adopting a defined strategy — and obsessed with it — Investors can fight the all-too-common temptation to time the market.