Now that summer is almost over (but not quite yet!), it’s time to start thinking about what the fall may bring.

Are we in for a September decline?

September is historically a volatile month for the stock market, and it’s the only month that has, on average, shown a decline since 1950, per this chart from

More recent charts illustrate the same effect, although with slightly different numbers. The next one, from Yardeni Associates, shows that valuations are at their second-highest level since 1979, below only those of 2000, and well above where they were in 2007.

An even more recent chart, from the same source, also shows high valuations. Some kind of pullback seems quite possible.

Comparing the more recent data and the older data, however, something else becomes apparent. Valuations have moved to a higher plane in the past 30 years, and pullbacks during that time period have not been nearly as severe, from a valuation perspective, as earlier drops. In 2000–2003, for example, valuations dropped to only 15x; even in 2008, valuations fell to10x, well above the 5x valuations we saw in the late 1970s and 1980s.

There really does seem to be a higher floor for valuations nowadays, which should help cushion any pullbacks.