The GoldSilver Team
GoldSilver has dubbed October as “Shocktober”, and for good reason. October has seen some of the most shocking and severe stock market crashes in history. From the Panic of 1907 to Black Monday in 1987, October is riddled with financial crises that send stocks plunging.
This October Effect is driven by a dangerous mix of human psychology and seasonal trends. Factors like herding, loss aversion, and negativity bias tend to be amplified in the fall. As investors return from summer vacations, markets become more prone to sliding on negative news and trends.
This makes October a uniquely volatile and treacherous month for equities. However, the same psychology that exacerbates market crashes also serves as rocket fuel for crisis hedges like gold and silver. Throughout history, major October selloffs have ignited enormous rallies in precious metals as investors flee towards safe havens.
GoldSilver is warning investors to prepare for yet another highly volatile October full of potential shocks and crashes. But while equities stumble, precious metals like gold and silver stand to surge higher. The historical data shows gold shining brightest when fear runs highest.
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As we head into a potentially volatile October, GoldSilver's Mike Maloney has several great videos analyzing historical financial crises and market shocks:
Mike summarizes the origins of the Greek debt crisis in 2010-2012 and presaged the larger global debt reckoning that would eventually necessitate a major monetary reset.
Mike questions whether the Fed was masking capital outflows signaling an imminent financial crisis that the public wouldn't be warned about until it was too late.
October's spooky historical track record shows it's wise for investors to be prepared. While equity markets often falter in the fall, gold has proven itself as the bellwether safe haven asset during times of crisis. Its ability to hedge against market turbulence and geopolitical tensions makes gold a prime beneficiary of the October Effect. For those looking to bulletproof their portfolios against October shocks, allocating to precious metals and crisis hedge assets could provide the protection they need. By tempering the irrational psychological forces that drive markets in October, investors can embrace the old adage - "Be fearful when others are greedy and greedy when others are fearful."