Continuing yesterday's theme, we have remembered a good joke - Mark Twain's quote:
"OCTOBER: This is one of the peculiarly dangerous months to speculums in stock in. The others are July, January, September, April, November, May, March, May, June, August, and February. "
This quote gave birth to yet another myth about the stock market: the stock returns in October being lower than in other months. This myth is called "Mark Twain effect”.
There are some proofs of Mark Twain effect: the 1929, 1987 and 2008 stock market crashes occurred in roughly October. Also, many other analysts are arguing the viability of this effect.
That's OK! But we are not statisticians. We are investors. Our goal is to make money from trading shares.
If the next two black-scenario-months ahead of us, we must not engage in statistical analysis - nobody pays of this job - we need to protect our capital. I.e. take profits, which have generated in the market. However, if these black myths will not act, be better for us. Our positions will stay open or partially closed.