History Says October Is the Stock Market's Most Dangerous Month. Here's My Defensive Playbook.
October has had its share of scary moments for investors over the years.
Overview
October has been a spooky month for investors. The Black Monday stock market crash happened on Oct. 19, 1987, when the Dow Jones Industrial Average plummeted nearly 22%. October 1929 was also a brutal month for the market, as the Dow plunged almost 13% on Oct. 28 (the original Black Monday) and nearly 12% the following day (Black Tuesday). Add in October 2008 (a 9% decline on the 15th and a 7.6% drop on the 9th) and Oct. 27, 1997 (a 6.8% decline), and the month has earned a reputation for being dangerous for investors.
There are reasons to be a little bit apprehensive as we enter October. The S&P 500 Index (SNPINDEX:^GSPC) is at its most concentrated level since 1965, while the Shiller CAPE ratio recently hit its highest level since the dot-com bubble. Add in elevated inflation, the upcoming midterms, and rising bond rates, and it's easy to feel uneasy as October begins.
Details
However, despite its history of stock market crashes, October isn't the stock market's worst month (it's actually September). That's why investors shouldn't start panicking. Instead, it's a more reasonable moment for getting more defensive. Here's my defensive playbook for October.
Source
Originally published at www.fool.com.