CFO Corner Week 43: Is October Really the Scariest Month for Stocks?
Every fall, October's reputation shows up right on schedule. The crashes of 1929, 1987, and 2008 have made it market folklore's "crash month" — Wall Street even calls it Octoberphobia. This Halloween-week CFO Corner looks at whether that reputation holds up (it mostly doesn't), why it sticks anyway, and how to build a plan that keeps a scary headline from talking you out of a long-term strategy.
The Reframe The scary part isn't the market — it's what we do when we're scared. Like a haunted house, the jump scares are real, but the people who get hurt are the ones who panic and run for the exit. A headline is about today; your investing plan is about decades.
The myths to clear up
"October is the crash month." According to Motley Fool research going back to 1950, September has been the S&P 500's weakest month on average, while October has averaged a gain of nearly 1%. And according to the Stock Trader's Almanac, more post-WWII bear markets have ended in October than in any other month — most recently in October 2022.
Why the reputation sticks: The October crashes got memorable names (Black Tuesday, Black Monday), and our brains treat vivid events like patterns. Meanwhile, the 2020 COVID crash happened in February and March, and the 2008 crisis kicked off with Lehman Brothers' collapse in mid-September. And statistically, one month always has to rank last.
"If I can just dodge the scary part, I'll come out ahead." This is the myth that costs investors the most — see the numbers below.
Build Your Scary-Headline Plan in 3 Steps
Know what each dollar is for — and when you need it. Long-term money (5+ years out) belongs in the market and is built to ride out drops. Short-term money — a down payment, an emergency fund — belongs somewhere safe, like a high-yield savings account, where a market headline can't touch it.
Understand what running costs. See J.P. Morgan's numbers below.
Let your autopilot do the brave part. Automatic contributions keep buying through dips — and buy more shares when prices fall. Then write a one-sentence "scary-day rule" for yourself, decided now while you're calm.
How a dip works in your favor
Monthly investment | Share price | Shares bought | |
Normal month | $200 | $100 | 2.0 |
After a 20% drop | $200 | $80 | 2.5 |
Same $200, 25% more shares.
The reality check
Market drops are real, and recoveries can take months or years. Staying invested isn't a guarantee — it's a way to avoid making a bad stretch worse.
October can still have a bad month. The calendar doesn't protect you or doom you.
If a downturn genuinely keeps you up at night, your investment mix may be more aggressive than you're comfortable with. Adjust it on a calm day, based on your goals — not mid-headline.
What's in your control How much you contribute, how your money is mixed, your timeline for each goal, and how often you check. Turning off price alerts on your investing app is a small move that makes a big difference.
This week's homework
List each investment account, what it's for, and when you'll need the money — and make sure nothing you need in the next few years is riding the market.
Confirm your contributions are automatic.
Write your one-sentence scary-day rule and save it where you'll see it.
Reflection prompt Picture the next really scary day in the market. What do you want to have already decided before it shows up?
Want to feel more confident about what you own and why? The Confident Investor Blueprint walks you through building an investing plan you can actually stick with.
