Greg Lesko: Will There Be An October Surprise From Wall Street
10/4/2012 (Updated 11:12:23 PM)Should Wall Street fear October? Greg Lesko is here to tell us.
This is the scary month and not just because of Halloween.
For the financial world, October is when some of the worst disasters happened on Wall Street. The big crash of 1929 that led to the depression occurred in October.
In 1987, the largest daily plunge in the Dow ever, over 22% known as "Black Monday" was also in October. And during the financial crisis of 2008, there was a frightful 19 day span when four of the five biggest point drops in the Dow's history brought the it down over 2600 points in October.
No Wonder Wall Street gets a bit jittery when pumpkins and bags of candy candy corn start appearing. But like monsters under the bed, the "jinx of October" is more myth than reality. In the past three decades, stocks have done well on average in October finishing the month up 70% of the time.
Many factors that paved the way for big crashes are well-known by now and probably already factored into the market. And there are trading "safety valves" in place to stop a panic plunge before it gets severe. Plus, Central Bankers here and in Europe are taking steps to stimulate the markets.
We also understand the ups and downs of the market much better than in the past, and barring some unforeseen disaster we can remain optimistic between now and Halloween.
So is Wall Street finally over its "October jinx?" You can always find people who will warn about doomsday scenarios in order to sell books or make headlines. But remember that with previous scary October drops, most so-called "experts" never saw them coming.
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