As the air turns crisp and the Halloween décor comes out, October often brings another familiar scary story, the so-called “October Effect.” It’s the superstition that the stock market has a history of behaving poorly during October, leaving investors bracing for ghosts of market crashes past. But before you run screaming for the hills, it’s worth remembering that this reputation is more trick than truth.
Why October Has a “Spooky” Reputation
The myth stems from a few infamous moments in economic history: the 1907 Bankers’ Panic, the 1929 crash that kicked off the Great Depression, Black Monday in 1987 and the 2008 Global Financial Crisis. Each of these events happened to occur in October, cementing the month’s eerie reputation in market folklore.
However, when you step back and look at the data, October is no more volatile than other month and in fact, it often marks the beginning of stronger market performance heading into year-end. According to historical S&P 500 data, October has delivered positive returns more often than not, serving as a turning point for market recoveries. Take October 2025, for example, which (so far) has seen markets hold steady near record highs, despite bouts of volatility.
Volatility Can Happen Anytime
Markets can fluctuate at any time of year. The causes — economic data, corporate earnings, geopolitical events, or shifts in investor sentiment — don’t follow a calendar. What matters more than any single month’s reputation is maintaining a disciplined, diversified investment approach that’s aligned with your goals and risk tolerance.
It’s normal to feel uneasy with short-term market movement, but it’s also a cue to check in on your long-term plan. October can be an ideal time to take stock of where you stand financially and emotionally.
Your October Financial Check-In
Think of this as your seasonal self-care routine, but for your money. Before the year wraps up, take a moment to review these key areas:
- Investment Allocations: Make sure your portfolio still reflects your goals, time horizon, and comfort level with risk. Markets shift over time, and rebalancing can help keep you on course.
- Progress Toward Annual Goals: Are you on track with your savings, debt reduction, and charitable giving goals for the year? A quick review now gives you time to adjust before December.
- Cash Reserves: Unexpected expenses happen, usually when you least expect them. Aim to keep enough in your emergency fund to cover three to six months of living expenses.
- Tax Strategy: Fall is an excellent time to connect with your advisor or tax professional. Reviewing tax-loss harvesting opportunities or maximizing retirement contributions before year-end can help improve your financial position.
A proactive approach in October means you can aim to enter the holiday season with confidence and clarity.
Staying Grounded Through Market Noise
October may have its haunted market reputation, but history suggests otherwise. Instead of fearing what might happen, use this season as an opportunity to get intentional about your finances.
If it’s been a while since your last portfolio review, now is a perfect time to connect with your financial advisor. A quick conversation today can help ensure your strategy remains aligned with your goals and that you can enjoy the fall season knowing your financial plan is in good hands.
