Historic Octobers

A RedBraced expert recently told us that "October . . is historically a weak month for equities." Worth checking, I thought. So I checked. The results are shown above. . My basis of calculation is - % change in the FTSE 100 between market close on the last trading day of September to market close on the last day of October in each year shown. We see that in this "historically weak month", the FTSE 100 Index has risen 19 times in 25, and has fallen in the other 6. The average change over all the Octobers since the FTSE 100 index was originated (January 1984) is only +0.29%. The maximum October gain was in 2002, when the FTSE 100 rose 8.55%. The biggest October fall was in 1987, when the FTSE 100 fell 26.1%. Now - this doesn't prove that RedBraces Angus talks through his hat, because we haven't compared this result with FTSE 100 performances in Januaries, Februaries . . . etc. And this analysis doesn't compare the FTSE 100 October performances with other indices, for example, the FTSE 250 Index or the FT All Share Index. Nor do we know what Angus would consider a "strong" performance. So in his own terms, he may well be right. But in my view the important thing to remember is . . . in randomly changing systems such as the FTSE 100 Index, the past is no guide to what will happen next, and your guess of where the Index will be at end October 2009 is just as good as the RedBraced oracles' . . . . or mine! Remember - if a consensus of experts COULD predict market movements reliably and accurately . . . there wouldn't be a market.