Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (42927)	8/24/2001 11:41:16 PM
From: kleht	Read Replies (1) \| Respond to of 100058

Stan: I agree, especially regarding September. And I did see the flaw of using only the past 10 years. It would be interesting to be able to go back 50 years and see how Octobers hold up.However, Wall Street 'wisdom' says basically to avoid the month because of its massacres. I have found that to be somewhat deficient advice over the years for the uninitiated. It's true, of course, that some of the biggest calamities do occur in October. However, even going back to the seventies there is a tendency for drops to end in October (sometimes November). What would make October less onerous than is generally thought is that many Octobers have not witnessed much of a drop at all. In a number of years with October bottoms a substantial amount of the drop occurred in August and September with the final plunge (and reversal) occurring in October. 1998 was such a year - hardly a ripple of a drop in October that year. Again, it really depends on the day of the month the bottom occurs. Avoidance of buying in October to me means missing some good values, whether it was 1998, 1987 or the nice bottoms in the mid to late seventies. In spite of the high P/E levels, market psychology could possibly do the same this year (not a prediction, of course). I just feel it's best not to get stuck in a bearish or bullish mode, let the market tell its own story and be ready for whatever surprises the market has in store. As to year-end selling it would seem, especially this year, that such selling could be occurring earlier than normal because of the dismal slowly dropping market conditions. As to tax selling, am I missing something here? I did not realize mutual funds paid taxes. The funds are required to distribute earnings and gains and losses and fund holders then pay the taxes. Otherwise there would be double taxation. Anyway, Stan, these are just some of my thoughts. I did find it interesting, though, that the record for the September-October period for the past 10 years was the opposite of what I had come to expect. Simply more evidence of the surprises the market loves to pull. Ken