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"The October Effect" - What Does This Mean for Investors?

October has a bad reputation for investors. Black Monday, Tuesday and Thursday all occurred in October 1929, after which came the Great Depression. In addition, the great crash of 1987 occurred on October 19th, and saw the Dow plummet 22% in a single day. These events gave rise to "The October Effect," the theory that stocks tend to decline during the month of October. In reality it is a psychological expectation rather than an actual phenomenon; most statistics go against the theory.

Although a severe market sell off is unlikely, it is possible that we could see a correction in the coming weeks or months triggered by congressional budget battles, instability in the Middle East, or other events already making headlines.

Corrections are frequently short-lived events, from a historical perspective. We cannot predict the future, but success often comes not with emotional investing or frequent trading but rather through discipline and patience.

Provided that you own investments that are appropriate for your age, objective, and tolerance for investment risk, in time you'll likely be in a better position to reach your long term goals.

Our CFS* Financial Advisors are available to conduct portfolio analysis and review, discuss asset allocation, and prepare income plans for retirees. If there is some way we can be of service to you and your family - give Stephen Seewer a call at (415) 674-4846.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. SF Fire Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.