Investor Glossary-october effectInvestor Glossary-october effectInvestor Glossary-october effectInvestor Glossary-october effectInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

October Effect

The HTML to link to this page
 

The October effect is a theory that stocks decline during the month of October. Although there is little statistical evidence to support the October effect, proponents of behavioral finance note the power of mass psychology to move markets. If enough investors subscribe to the October effect and act on their beliefs, stocks will indeed decline in October and the October effect will become a self-fulfilling prophesy. Those who believe in the October effect argue that many if not all the major stock market crashes have happened during October. The crash of 1929 occurred in October and is considered a classic example of the October effect. Believers in the October effect also point to the crash of 1987 which took place on October 19th. For the record, the worst performing month from 1930-2004 was September (S&P 500 averaged a 1.28% loss), while the October effect actually netted investors an average 0.67% .



Rate this October Effect definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, irrevocable trust, FICO score, labor relations, required rate of return, current ratio, debt service coverage, margin rate, risk management, retained earnings, covered put, 1035 exchange, average price per share, phantom income, 144a, Key Rate Duration, implied volatility, quality assurance, cancelled check, reverse mortgage, stock market close, limit order, inflation, liquidity ratio, diluted share, command economy, option premium, EBITDA, ex-dividend, minority interest, FTSE, annual return, 401a, LIBOR, balance sheet, wholly-owned subsidiary, per diem, ex-dividend date, Zero Cost Collar, deferred revenue, stock split, 1031 exchange, VIX, real GDP, deferred tax, class C shares, open position, dividends payable, APR


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use