Welcome to beautiful October with its crisp nights and changing colours.

For the subject of this commentary, I’d like to focus on what is known as the “October Effect”. In case you’re not familiar with the term, it is a perceived market anomaly that stocks tend to drop in price during this month. It is considered to be mostly a psychological expectation, rather than an actual phenomenon.

Some investors may be nervous during October because they remember what came to be known as “Black Monday” on October 19th, 1987. It was on this date that the Dow Industrial Average plummeted -22.6% in a single day. Despite the ominous title, this seeming concentration of days is not statistically significant. Yet here we are more than 30 years later, with some investors still asking themselves, “I wonder if I should sell because October is always bad”… Here’s the truth: October has marked the end of more bear markets than it has acted as the beginning.

I’m including a report here entitled, “Slow down, look around” which has been produced by our Global Portfolio Advisory Committee. In it they address the recent cooling-off of the markets (pulling back approximately 5% since early September), while reminding us that it shouldn’t come as a surprise that a rest is in order. I encourage all of you to read this report as it is full of interesting information that should put even the most wary of you, at ease.

As always, Amanda and I welcome your calls and/or emails, so please do not hesitate to reach out if you need anything.

Now get out there, away from your devices and breathe in the fresh fall air!

Libby

 

 

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