The TSX just broke a record quarterly streak. Here's why October's crash reputation shouldn't spook you

Now, investors are wondering whether the October curse — a month historically known for market volatility and potentially dangerous dips — should be a factor in present-day investing decisions.

Where does October’s scary reputation come from?

October earned its reputation as a “cursed” month for investors because some of the biggest crashes in stock-market history happened during this month.

In October 1929, the Dow Jones Industrial Average plunged nearly 13% in a single day, followed by another drop of almost 12% the next day. Then came Black Monday in 1987, when the Dow tumbled 22.6% — still its biggest one-day percentage decline on record. Canadian investors have their own painful example: the S&P/TSX Composite Index fell 16.7% in October 2008, at the height of the global financial crisis.

However, not all investors are convinced. Analyzing market drops in a Bloomberg article, portfolio manager Stan Wong writes that these specific market drops are “hardly representative of the typical October.”

What do the numbers actually say about October?

Wong’s analysis of Bloomberg data from 2001 through 2025 found the TSX rose in 17 of 25 Octobers — 68% of the time — with an average gain of 0.4%. The S&P 500 did better on average, gaining 1.6% and finishing higher in 16 of those years.

While the average returns for October don’t support the notion of a cursed month, the volatility experienced during this month does — as illustrated by the CBOE Volatility Index (^VIX), which tracks expected swings in U.S. stocks — and is often called Wall Street’s fear gauge.

The VIX is calculated from S&P 500 option prices and represents the market’s expectation of how much the S&P 500 could move over the next 30 days — and expressed as an annualized percentage.

That means a VIX around 20 is often associated with relatively normal/moderate uncertainty, while readings above 30 indicate much greater expected volatility.

For the month of October, the VIX averaged about 21.8 — higher than any other month.

In other words, October tends to be bumpy, not necessarily bad. Bigger daily swings can feel alarming, but in most years the month still ended higher than it started.

As Wong stresses: interest rates, inflation, corporate earnings and valuations matter far more than the page on the calendar.

So, why do market crashes stick with us?

Behavioural finance has a name for it: availability bias. People give more weight to vivid, easy-to-recall events, then to stable, non-eventful periods in time. In practical terms that means a quiet October when stocks inch up 1% is quickly forgotten, while a 1987-style crash shapes perceptions for decades.