Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

What to Expect for Stocks in October

By

Should investors fear the month ahead?

PrintPRINT
For all the tough talk heading into the month, September didn't prove so scary after all.

Stock pickers can't be blamed for thinking these past few weeks were going to scratch up their portfolios. After all, historically, the market does pretty poorly as fall kicks off. The average price change for September, going back to 1929, is a decline of 1.2%. The market has typically fallen 56% of the time in September.

However, through Tuesday's close, the S&P 500 was up 3.9% for the month. For the quarter, we're up 15.4%.

Let's put that in historical perspective, friends: That's the 17th best gain of all quarters since 1929, and 5th best of all third quarters.

Sam Stovall, for one, isn't surprised. The chief investment strategist at Standard & Poor's told clients heading into the month that he was looking for a positive September.

"I can understand why people were worried because historically September is a bad month," Stovall tells Minyanville. "But, in the Septembers following the end of bear markets, the market does very well."

Stovall notes that, on average, September has risen 1.8% in the 14 times following the end of bear markets since 1932.

Now, more importantly, what can investors expect in the month ahead?

If history is any kind of guide, we can expect a V-shaped month, strategists say: We'll come in, drop, but close higher.

However, even dedicated bulls are on the lookout, concerned about how the market will react to any kind of third-quarter earnings disappointments.

October comes with a horrible history of market trivia: The "Great Crash" in 1929 hit during the month of October. So did the "Crash of '87." Last year, the month of October was again particularly memorable for all the wrong reasons -- the S&P 500 fell 16.9% in just 30 days, and that was on top of a 9.1% decline in September.

But, historically speaking at least, October isn't usually all that dramatic. In fact, as Stovall says, it's a pretty "blah" month.

Since 1932, the S&P has just eked out a positive advance: up 0.2% on average.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE