Rocky - tober

We keep hearing about the "October Effect" - it even has a definition at investopedia.com.au. October 2018 has clearly been a shocker for equity markets. The S&P/ASX 200 Index is down 6.5% and the indices covering smaller Australian stocks are down at least 10%.

Earlier this year we pulled together five years of weekly price data for the S&P/ASX Small Industrials Index and reviewed the week-by-week average performances. So we've returned to that data to have a look at how this index performed in Octobers past.

We counted a week as belonging to a month if its last trading day was in that month - so the week ended September 1, 2017, was grouped in September even though it started in August.

Based on this data, October does not stand out as such a troublesome month: only the first week of October had a negative return on average, with the other weeks up on average. The first and third weeks of October have been negative more often than positive - but other months were worse as the figures below show.

Figures 1 & 2: S&P/ASX Small Industrials weekly returns over past five years - the number that were negative and average returns



Note: data through to late January 2018
Source: Iress, Equitable Investors

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