Investor’s Business Daily has recently published an article that may have put Apple investors at ease. According to them, the market has a reputation for performing poorly in October, a month that just started this past Thursday. But when it comes to Apple, the story is different.
IBD has looked back five years and noticed that shares of the Cupertino company have been a top eight October performer among all S&P 500 names. This sounds encouraging. But to me, five years seem like too short a time frame to draw firm conclusions upon. So, I went further back in time: to Apple’s IPO year of 1980.
October has been phenomenal
The histogram below illustrates Apple’s performance in October only. The x-axis depicts the return buckets, and each bar represents the number of months that have fallen within each bucket. Below are some key observations:
- On average, Apple has returned 6.8% in October (6.1% median). The number is much larger than the overall average of all months in the year, which has been 2.2% (1.8% median).
- Averages aside, the range of returns has been very wide. In October of previous years, Apple has dropped by as much as -32% (October 1987, “Black Monday” month) and climbed as high as 39% (October 1982, shortly after the IPO).
- But don’t get too comfortable: while October’s median return has historically been quite strong, November’s and December’s have been below the norm.
- Also, average returns in October, November and December have been much worse since 2007 (the introduction of the iPhone) than they had prior to 2007. In the case of November and December, the average returns have been negative.
Check out the video above for key takeaways.
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