My growth stock portfolios continue to significantly outperform their benchmarks in what is turning out to be a surprisingly strong September. I am confident that the traditional midterm election rally will lift the market strongly over the next quarter and full year, but we haven’t been sure (yet) when that rally will officially begin. For now, I credit rising earnings, slow-but-sure economic growth and a new wave of “merger mania” for launching the market into a surprisingly strong early-September surge.

In fact, Barron’s reported Monday that “stocks are up nearly 6% in September, which marks the best start since 1939.” That sentence shocked me. Hitler invaded Poland on Sept. 1, 1939, launching World War II with shocking speed, reaching Warsaw a week later. September 1, 1939 was a Friday, the start of Labor Day weekend. So how did the market fare when it re-opened Tuesday, Sept. 5, 1939?

On Sept. 5, 1939, the Dow rose 12.87 points (+9.5%). In the first half of September 1939, the Dow rose a near-euphoric 14.6% during the fortnight in which Hitler decimated Poland. After that, the Dow began a slow swoon that lasted into April 1942, but why the two-week rise after Hitler’s initial invasion?

That’s a hard question to answer. The only cliché that fits is this: “Sell on the rumor; buy on the news.” Think of the worst, scariest dates of the last 50 years. How did the market react?

• Oct. 22-26, 1962: The Cuban Missile Crisis brought the world to the brink of destruction, but the stock market stayed surprisingly calm, falling less than 1% for the week, then rising strongly (+3.5%) in the two days after the threat faded. The much bigger collapse that year came in the spring of 1962 (down 28%), after President Kennedy launched a verbal war with U.S. Steel.
• Nov. 22, 1963: After President John F. Kennedy was shot on an early Friday afternoon, the market fell about 3%, then closed early. The market closed for the president’s funeral the next Monday, but when it opened on Tuesday, the market rose 4.5% that day and 5.5% for the week.
• April 4 and June 5, 1968 brought two more traumatic assassinations: Martin Luther King, Jr. on April 4, and Robert F. Kennedy on June 5. King was shot on a Thursday evening. The Dow fell less than 1% the next day, despite widespread national riots overnight. Then, the market rose 2.1% on the following Monday and 5.1% for the first full week after King’s death. After RFK’s death, the market fell 1% the first day, but then it erased that loss over the next few trading days.
• Jan. 28, 1986: The most traumatic single-day shock between the 1960s and 2001 was probably the explosion of the space-shuttle Challenger on a sunny Tuesday morning in 1986. The stock market gained 1.2% that day, and kept rising during the next day, week and month. The trend is clear. These external “black swan” events do not seem to trouble the overall stock market.

Last weekend marked the ninth anniversary of 9/11, a direct attack on America, but particularly an attack on the whole idea of capitalism and world trade, in which  two commercial airliners were flown into the twin towers of the World Trade Center. America was already in the midst of a recession and a bear market at the time of the attack. Wall Street, just a few blocks away, closed for the remainder of the week and opened down 685 Dow points (-7.1%) the following Monday. But the market reached its September 10 levels within two months, on Nov. 9, 2001, and kept rising into the spring before suffering another sinking spell.

After a similar attack on America at Pearl Harbor, the initial market reaction was surprisingly mild. After the Sunday morning attack of Dec. 7, 1941, the Dow declined less than 3% on Monday, Dec. 8 (falling from Dow 115 to 112), but then the market stayed remarkably level over the next two months, dipping briefly below 100 in April, then resuming its inexorable rise during the rest of World War II.

In short, the stock market will probably leave you plenty of room to make an orderly exit during the worst of times, but the greater investment risk you face in such traumatic times would be a panic sell, followed by a failure to re-enter the market in time. If you assume the worst and sell all stocks after a crisis strikes, you could miss the inevitable recovery, as America rediscovers its strength in the midst of adversity.