Markets were nervous on Tuesday and stock prices collapsed, marking the worst month ever for Wall Street.

The September Effect refers to the historical underperformance of the stock market during the month. According to Ryan Detrick, chief market strategist at consulting firm Carson Group, September was the market’s worst-performing month in the last 10 years, 20 years, and since 1950. According to Fisher Investments, it is also the only month since 1925 with an average negative return (-0.78%).

What are the reasons for the September effect?

There are several theories to explain this historical pattern. One suggests that traders returning to work from summer vacation rebalance their portfolios in September, increasing selling volume and putting downward pressure on stock prices.

Another theory is that bond issuance tends to increase in September, as the summer holidays end; these bond sales attract money that would otherwise have supported stock prices. Another theory blames mutual funds, whose fiscal years typically end on October 31. Funds, the theory goes, close out losing positions in the last months of their fiscal year for tax reasons.

None of these explanations are ironclad. While trading activity tends to decline during peak holiday months, algorithmic trading and the mobility of work in the smartphone age have somewhat mitigated the impact of summer holidays on stock prices. And research has shown that mutual funds tend to anticipate the price pressure of seasonal selling and adjust accordingly.

A few bad September days spoil the month

September’s bad reputation seems to stem from a few unlucky years rather than any specific cause. In September 1931, at the height of the Great Depression, the S&P 500 lost 29.6 percent — its worst month ever. Another bad September was 2008, when the index lost nearly 9 percent after the bankruptcy of Lehman Brothers.

Given September’s unusual returns, there are plenty of reasons to stay in the market. Over the past century, stock prices have risen slightly more often in September than they have fallen (51% versus 49%), so sitting out the month is hardly a guarantee of success.

In fact, the median September return, which neutralizes positive and negative outliers, is exactly 0% over the past 98 years, according to Fisher Investments.

The September effect in election years

This year, investors worried about September may be even more concerned because of the looming presidential election, and uncertainty about the outcome could weigh on stocks over the next two months.

Historically, however, presidential elections have not made September worse for stocks. In nearly a third (62.5%) of the Septembers preceding a presidential election (15 of the 24 elections since 1925), stock prices have risen. That’s significantly better than the overall average and only one percentage point below the monthly average. The median September return in years with presidential elections is 0.3%.

However, markets react daily to views on the health of the economy and investor expectations, not historical patterns. Investors’ views on this particular election cycle and the perceived impact of each candidate’s economic proposals could influence stock performance this month.

There are many other uncertainties besides the election. The health of the labor market, inflation and the next steps of the Federal Reserve are more likely to determine stock prices this month than any notion of a September effect.