Charts of the Day: October, the good and the "bad"

Well, if we live through today, September didn't deliver September. I mean, September is notorious for its abysmal historical stock market performance, and this year it turned out okay.

Ah, but October looms. The month of the great and small crashes of 1907, 1929, 1987, 1989, 1997 and 2008. The month that, despite its horrendous history, has been one of the historically better months of the year. Yep, that's right! And, yep, market crashes evoke strong, lasting emotional responses that  can effectively mute the internal pleasantness engendered by bull markets.

So here's how October shakes out historically:    click each insert to enlarge...



For the past 100 years (the Dow), October's been up 61% percent of the time with an average return of .25%. For the past 50, it's 60% with a .65% average gain. The last 20 years have seen an up October 70% of the time with a whopping 1.96% average gain!

Ah, but if volatility freaks you out, and if history repeats (like it did not in September), you may not enjoy the lift (assuming the market lifts). For October -- despite its stellar long-term results -- as you might've guessed, happens to have been one of the most volatile months for the market.

The following features the average daily % change (not a performance chart) for the S&P 500 since 1928:


Source: Bespoke Investment Group