what is true about october is that it traditionally has been the most volatile month for stocks according to research from lpl financial there are more 1 or larger swings in october in the s p 500 than in any other month in history dating back to 1950 
some of that can be attributed to the fact that october precedes elections in early november in the u s every other year 4september not october has more historical down markets however october also has had its fair share of record stock market crashes some of the events over the decades that have given october the reputation for stock losses include interestingly the catalysts that set off both the 1929 crash and the 1907 panic happened in september or earlier and the market reaction to them was simply delayed in 1907 the panic nearly occurred in march throughout the year the public s confidence in trust companies persistently diminished they were considered risky because of their lack of regulation eventually public skepticism came to a head in october and sparked a run on the trusts 5the 1929 crash arguably began in february when the federal reserve banned margin trading loans and cranked up interest rates 6in contrast to october effect predictions october 2022 was one of the most positive months in u s stock market history with the dow jones up around 12 and the s p 500 up close to 6 7the disappearance of the october effectthe numbers don t support the october effect if we look at all october monthly returns going back more than a century there simply is no data on average to support the claim that october is a losing month not surprisingly some historical events have occurred in the month of october but they most likely have remained in the collective memory because the name black monday sounds ominous markets have also crashed in months other than october many investors today have a better memory of the dotcom crash and the 2008 2009 financial crisis yet none of those days were given the black moniker to bear for their particular month lehman brothers collapse happened on a monday in september and marked a major escalation in the global stakes of the financial crisis but it didn t get reported as a new black monday for whatever reason the news media no longer leads with black days and wall street doesn t seem eager to revive the practice either moreover an increasingly global pool of investors doesn t have the same historical perspective when it comes to the calendar the end of the october effect is perhaps inevitable as in reality a gut feeling mixed with a few random occurrences and a media label created the myth in a way this is unfortunate as it would be ideal for investors if financial disasters panics and crashes occurred in just one month of the year 