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