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


Investor Glossary | 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