The financial industry keeps this little know fact a secret. I will tell you this little secret, which will make you a more cautious investor. Throughout the history of the United States financial market there has been one month that has caused the following crashes:
1929 – Black Thursday / The Great Depression
1987 – Black Monday
1989 – Crash of the Junk Bond Market
1997 – “The Mini-Crash”
2008 – The Great Recession
(The “IMF warned that the world financial system was teetering on the brink of systemic meltdown”)
Have you figured out the month that is considered the “Jinx” Month? Well, it is the month of October. In leap years, no other month starts on the same day of the week as October starts.
In other years, October starts on the same day of the week as January. Maybe the market crashes have to do with halloween? Whether there is some philosophical, psychological or technical reason why October has been the birth of most of our worst market crashes, I can’t be certain. My guess is that in October 1st the United States begins its Fiscal Year. The way the budget is allocated gives investors knowledge of where the money will be going and using this data, they can search for places to invest. Maybe these crashes are more political? Maybe Capitol Hill really does control the confidence and the future of our economy?
This guess doesn’t explain the 1929 crash. The reason why is because prior to 1976, the fiscal year be can on the 1st of July. This was changed by the “Congressional Budged and Impoundment Control Act of 1974” and one of the reasons for the change is to allow Congress more time to arrive a budget each year.
Let us know why do you think October is a “Jinx” month? -@DociReport