Are stocks about to fall?

Numerous circumstances could drag the stock market down over the coming months.

It was a good start to September yesterday, with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) climbing 53.3 points or 1% despite a number of companies going ex-dividend. However, the index could be in for a rough ride over the next month or two based on a number of circumstances.

First and foremost, the market has traditionally struggled through the months of September and October. According to The Australian Financial Review, September has, on average (over the last three decades or so), usually seen slight gains whilst October has marked the worst month of the year. This is partially caused by the return from holidays in the northern hemisphere, whilst the five-year anniversary of the collapse of Lehman Brothers could also play on investors’ mentality.

Meanwhile, growing geopolitical risks in Syria, violence in Egypt and strong signs that the US Federal Reserve will begin tapering off from its bond buying program could also weigh stock markets down.

Should this be the case, investors could be presented with an excellent opportunity to stock up on shares, whereby the best time to buy is when others are fearful. One company that has already begun to fall is mining heavyweight BHP Billiton (ASX: BHP), whilst telecommunications giant Telstra (ASX: TLS) is also sitting nearly 4% below its August high.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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