My pal Jeff Macke of Yahoo Finance saw the piece I wrote on See It Market about October seasonality and he made it into this awesome video.
Feel free to read my post one more time, but the quick summary is October isn’t really that bad for stocks, even though it gets a bad reputation. I found it was just an average month and the stock market tends to bottom later in the month. Also, based on the Presidential Cycle, October is extremely strong during the 2nd year (so this year) of the cycle.
Here are a couple excerpts from my post:
The past 10 years October is just slightly positive, but I’m impressed with that because it includes a -16.94% drop back in 2008.
So October is a middle of the pack month most years, but remember this is the second year of the four year Presidential cycle. Turns out, October is the strongest month during this year. Going back to 1950, October is up a solid +3.35% on average and up three out of four times. Not too bad.
I did note, though, that the month has the highest standard deviation of any month for stocks. So volatility shouldn’t be unexpected… and we have already seen some of that here in the first few days of the month with the S&P 500 dropping as low as 1926.03 yesterday and currently trading over 1960.
With that, I give it away to the always entertaining Jeff Macke of Yahoo with “The Truth About October Markets”:
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