Getting Ready for the October Effect, and Other Stock Market Strategies

The October What?

DOW +18.38—-NASDAQ +4.38—-SP500 -0.02—-NYSE -23.20

Portfolio Leaders: BPT, BA, ISRG
Portfolio Laggards: SBUX, AMZN

I’ll be honest with you. I’ve never heard of the October Effect until recently. Is this something someone made up not too long ago?

Could stocks typically falter in the month of October? And if they do, will they begin to rebound heading into December when there could be a Santa Claus Rally?

Or should we hold on until May to sell and go away?

Many of these terms have dated back to the ancient days of the Stock Market (pre-internet) when we had to call a broker to buy or sell shares of stock.

My feeling is like the Bourne Supremacy quote (I think): “Hope for the best. Prepare for the worst”.

So, for October, I am definitely prepared to expect possible dips either with certain stocks, or the whole stock market in general.

Essentially, you should have some capital ready to swoop down on stocks whenever the markets takes a tumble. It’s sad to not have anything available when the stock market dips. And if you are a more frequent trader—like a Day Trader or a Swing Trader—you REALLY need the capital ready to invest!

I currently maintain a portfolio that is 1/3 cash, 2/3 stocks. That might be a lot of cash drag, but if you have all your money tied up in stocks and no capital to buy when the time is right, then all you can do is watch the show without being a part of it!

I always have cash-on-hand at any time to buy new stocks. Always.

So, forget the jargon. Dips and downturns can happen at any time of the year.

Be prepared!

The Week’s Leaders

BP Prudhoe Bay (BPT)
finviz dynamic chart for  BPT
Boeing (BA)
finviz dynamic chart for  BA
Intuitive Surgical (ISRG)
finviz dynamic chart for  ISRG

Disclaimer: The content provided here is for information and entertainment purposes only. It is not intended as an offer or solicitation to purchase any investment. And this material should not be taken as investment advice, since investors’ needs and strategies may vary. Investing in equities is subject to extreme volatility.
Trade at your own risk.

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Carlos Rull

Carlos Rull is a musician living in the San Diego area. His interests include Yoga, Eastern Philosophy, Zen Buddhism, and Gardening. He plays drums, piano, and composes New Age & Ambient music, and his albums are available on iTunes and

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