Ugly October

By Mark Bertrang, The Creator of the Financialoscopy® on Wednesday, November 14th 2018

What is it about the month of October?  More often than not, it’s rarely a good month for money.

Here are some of the numbers, from this past month:

The S&P 500 lost 6.8% in October, its worst month in more than seven years.  In September of 2011, the index recorded a loss of 7%.  Back in October 2008, it fell by 16.8%.

My take – We are back to reality.  The market goes both ways, up and down.  Market investing is not for wimps.

As last month began, the S&P 500 was up 10.6% for the year.  When October ended, the S&P 500 had to readjust those numbers, up just 3% for the year.  Ouch!  That doesn’t even take into consideration the volatility that we experience during the first days of this month.

My take – One month, in fact just a few days, can change your entire financial plan.  Live by the market, die by the market.  If your financial plan only succeeds based on stock market returns, let’s visit about your plan.

Before the current S&P 500 bull market, the next most recent bull ran five years from October of 2002 through October 2007.

My take – The current bull market has been running for over nine years.  Perspective people, good things don’t continue forever.  I am not saying the market is going south – no!  I am saying, many have forgotten that the market is volatile.  It’s the nature of the beast. That’s why they use the symbols of bulls and bears.  I would be scared to be trapped in a holding pen with either one.  They can both be ugly and mean.  Remember, they are beasts!

These beasts sometimes don’t snort and roar immediately.  Before the current bull market, it took the last bear market nine months to drop 20%.  Nine months!  That’s a long time to go through labor, before the next bull market. 

My take – Again, the market is a rough road.  Focusing on losing money in a day, a week or a month or gaining money likewise, is silly.  Turn off CNBC.  Investing isn’t like football.  Have you ever noticed, how the CNBC Studio looks so similar to ESPN’s sport central?  Aren’t they’re both planning to your emotions?  Don’t judge the performance of one portfolio over another based on an occasional field goal, whether a missed kick or the ball right down the center.

A good portfolio should have a balanced offense and defense. Remember, no Monday morning quarterback ever got a job calling plays for a professional football team.  Most, don’t even get up to get their own beverage.  “Hey honey, could you get me a beer?”

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