The stock market in the US has been up and down in September, so it’s no surprise that October is going to be even wilder. September is usually the worst month for stocks, but October is the wildest month of the year, according to the chart below.
If October follows the average for the year, then the stock market won’t drop as much as it did in September, but investors will still be feeling the heat. You might think that October’s volatility is due to the 1929 and 1987 market crashes, but that’s not the case.
Even if you take those two years out of the equation, October still has the highest volatility rate. There’s also no trend in October’s place in the volatility rankings over time. If you look at the history of the Dow since it was first created in 1896, October has the highest volatility in both halves. So why would October be so volatile? I don’t have a good answer, and that’s usually not a good sign.