Black Monday historical photo
I would file this one under ‘trivia’ rather than ‘tradeable’ but since 1950, the single-worst day for owning stocks is October 19. The average decline over those 72 years is -0.51%, according Carson Investment Research.
Why?
When you look at this chart, the 19th-20th tends to show general softness, which might reflect some kind of monthly pattern of stock market flows in general.
But more broadly, it reflects a single day where stocks were crushed: Black Monday was October 19, 1987. The index fell 20.47% that day.
Two other October 19 selloffs also stand out:
- Oct 19, 2007 the index fell 2.56% as worries about the US housing market started to pick up at this time.
- Oct 19, 2018 the index fell about 1% as part of a larger October downturn that saw a 7.3% decline, which was the worst October since the financial crisis. The market was worried about valuation, rate hikes and trade tensions with China at the time.
Overall, the lesson here is probably ‘be careful with averages’ rather than ‘be careful on October 19’. Here is the recent trading history of October 19:
Notably though, if we keep getting bond yields rising, the elements are in place for another brutal day for stock markets.
