October tends to close strongly, despite greater-than-normal drawdown. (Median drawdown and close for all other months since 1990 is -2.0% and +1.2%, respectively.) pic.twitter.com/iA7nmvfywa
— Mark Ungewitter (@mark_ungewitter) October 5, 2021
Today’s Chart of the Day was shared by Mark Ungewitter (@mark_ungewitter). The red dots represent the performance of the S&P 500 in each October over the past 30 years, and the blue bars represent the intra-month drawdowns. As we mentioned last week, October has a spooky reputation because some of the worst crashes in history have taken place in October (1929, 1987, 2008). It’s also one of the most volatile months of the year, with a median drawdown of -3.0% vs. a median drawdown of -2.0% in all other months. Furthermore, October has more 1% moves (up or down) than any other month. Despite the turbulence, Mark reminds us that October has historically finished strong, for a median gain of 1.4% vs. 1.2% in all other months. In other words, it has historically paid off to stay long and strong throughout this challenging month.