It seemed best this month to use excerpts of two interesting articles for this month's entry.
LONDON (MarketWatch) -- This October marks the 20th anniversary of the 1987 stock market crash, the biggest one-day post-war percentage drop for U.S. markets.
The crash came against a backdrop of inflation fears, rising oil prices, Middle East tensions and a host of other eerily familiar worry signs in Wall Street's most notorious month, and helped cement October's reputation as the toughest month for the markets, at least psychologically. So, could it happen again?
Could the world's stock markets wake up one morning this month and suddenly find there is no 'bid' for shares and start plummeting? Could someone mess up in the Middle East, where tensions are already high, and do something so completely unexpected that people suddenly just want out?
Or could an overheated market in Asia, Shanghai perhaps, suddenly roll over, sparking a cascading series of falls as complex, computer-driven derivative positions suddenly lose their footing leading to one great global belly flop?
Uncertainty and fear are ever present agents in the markets and can overwhelm greed and optimism at any time. Unexpected geopolitical and financial events are an ever present possibility.
The Ides of October
Commentary: How 2007 is different from 1987 and how it's the same
The more we wade through the minefield that is today's credit crunch the more is written about the last time we saw such problems -- 1987. Parallels are also being drawn in politics, the dollar, war and Wall Street itself so this confluence of coincidences may not be such happenstance at all. Perhaps it is telling us what is going to happen in the very near future.
October has the reputation as being the scariest month of the year and not because it is the home to Halloween. All of the really big market plunges -- 1929, 1987 and even the mini-smashes of 1989, 2000 and 2002 -- all happened in this month so investors are understandably concerned.