Please give us your email address. Today is Memorial Day in the United States, a national holiday that has also come to symbolize the unofficial beginning of summer. Didn't think so. The simple fact is that the summer brings so many things to distract peoples' attention from their investments that there is a measurable decline in trading volume on the major stock exchanges. Until people in droves decide to use their computers outdoors and traders stop taking summer vacations, this trend is likely to continue.
Summer is an especially vulnerable time for technology stocks.
Since at least the late 1980s tech stocks as a group have gone through a downturn at some point each summer. Some of this is justified in that the summer months tend to produce the weakest sales in a technology company's year. Businesses buy at the outset of a new year because they have newly-budgeted money to spend, but during the summer many businesses slow their expenditures to conserve the remaining budget until the end of the year, at which point they spend whatever is left. Businesses are also aware that the computer industry's largest trade show, Comdex, takes place in November and is typically the event at which manufacturers introduce the next generation of products. Many businesses defer purchases until then to avoid buying products that will be obsolete in a few months.