First things first, we send our prayers and positive thoughts to everyone impacted by the hurricane. As someone who spent many family vacations on Sanibel Island as a kid, this one hits hard. Please stay safe down there.

Turning to markets, the bear market continues, with stocks making new lows seemingly every day. Then to add to the fun, the calendar turns to October next week. This month is known for some spectacular crashes. 1929, 1987, and 2008 come to mind as examples of bad times for this spooky month.

Mark Twain maybe put it best when he said, “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”

As we noted last month, September is historically one of the worst months of the year and it does even worse when things are bad heading into it. That, unfortunately, played out in 2022, but all isn’t lost, as October might get a bad rap, but historically it is actually a strong month. In fact, during a midterm year, October is the best month of the year for stocks. As the chart below shows, we are leaving the historically weak August/September period and may be moving into some of the best times of the year.

Another potential positive in October (besides it being my birthday month) is when stocks do quite poorly in September, a bounce back tends to be normal. As the table below shows, a 7% or more drop in September tends to see a nice snapback in October. Yes, 2008 is in there, but all the other years saw green (sometimes a lot of green) the following month.

Lastly, October is known as a bear market killer. Turns out, 6 of the past 17 bear markets since World War II ended in this month. With stocks in a vicious bear market once again heading into October, we’d be open to another potential major low taking place soon.

Things aren’t easy and people are very worried. Please continue to follow the Carson Investment Research team, as we analyze it all and give our honest opinion on what is really happening out there. To help, be sure to read 10 Answers to Questions About the Bear Market for more our of take on this bear.

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