October can be spooky for investors — here's why experts say not to worry


October has a spooky reputation with investors, but experts say there's no need to fear the stock market.

This month has sometimes been horrifying, historically: Over the past century, three of the darkest days on Wall Street all happened during October.

"The big one is October 1987, when the Dow plunged 22% in a single day," says Jason Lambert, the president and CEO of Northwest Financial & Tax Solutions, near Portland, Oregon. That day, now known as "Black Monday," "was the worst single-day drop, percentage-wise, in history."

The Great Depression began after a market crash in October 1929 and the financial crisis that sparked the Great Recession started with an October market meltdown in 2008.

There's another reason October has a bad reputation, says Lambert: "Market volatility, historically, is higher" in October. "Volatility implies fear," he says, "even if it doesn't mean that the market is moving up or down."

Market volatility, historically, is higher [in October]. Volatility implies fear, even if it doesn't mean that the market is moving up or down.
Jason Lambert
President and CEO, Northwest Financial & Tax Solutions

Market volatility is often measured using the CBOE Volatility Index (VIX), which Wall Street pros often refer to as a "fear gauge." On average, stock volatility has been 25% higher in October than in other months.

All the same, here's why experts, and the data, say you don't need to worry about your investments in October.

October's bark may be worse than its bite

The data shows that October actually isn't all that special. "Historically, October is just right about an average month," Ryan Detrick, senior market strategist for LPL Financial, recently told CNBC.

In fact, market performance in October tends to be better than other months, Lambert says, with the S&P 500 gaining nearly 2% on average.

Jean Chatzky explains how to set money goals

Those big three events left an outsized impression in the minds of many investors. But they were just that: one-time events. It may be simply a coincidence that they all happened in October.

There's a good reason for the unusual volatility, too. Markets can be more turbulent in October in part because of earnings season and also thanks to the money managers who chase year-end returns.

Spooky markets shouldn't have you running scared

October may be spooky for investors but that doesn't mean you should hide until after Halloween. Even if the markets dip, that may open up an opportunity for you to buy stocks at a lower price. And the turbulence has a way of sorting itself out, especially if your investment strategy stays consistent.

The markets may go up and down with the news cycles, but investors tend to come out ahead in the long run. "Stick to your plan," Lambert says. "You can weather the storm."

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.