Fearful October? Average Returns in US Stocks Are Ordinary

October is often called the month of fear in the US stock market because the crashes of 1929 and 1987 both struck in October.

But October’s average performance has been ordinary. Citing Dow Jones Market Data, MarketWatch reported on Oct. 6 that the S&P 500 posted an average gain of 0.5% in October over the 98 years from 1928 through last year. That tied with March for eighth place among the 12 months of the year. The index rose in October in 58% of those years, or about six times out of 10. The worst month was not October but September, when the index fell an average 1.1%. MarketWatch said October’s average return was ordinary.

Some investors, however, point to Oct. 9 as the day the current bull market could end. Since 2000, Oct. 9 has twice marked a major turning point for US stocks. On Oct. 9, 2002, the S&P 500 hit its bear-market bottom after the dot-com bubble burst. In 2007, the index reached what was then a record high and began to decline after peaking on Oct. 9. The global financial crisis erupted the following year.

Some analysts also say this October may instead coincide with a favorable period for stocks. The reason is that the US midterm elections will be held on Nov. 3. Dow Jones Market Data’s analysis since 1950 showed that in years with midterm elections, the S&P 500 rose an average 3.9% in the month before the vote.

Park Ju-yeon