We Don't Live in a World of What-Ifs

October has a lousy reputation in the stock market. Not entirely without reason, although it's a little unfair.

Its bad reputation probably stems from the outliers that occurred in October over the years: the Panic of 1907, the stock market crash of 1929, and the financial crisis of 2008. October was particularly nasty on each occasion. Yet, looking back over the past 100 years in the US, where data goes back that far, even this notorious month has managed to deliver a positive average return. As have most months, by the way, which makes sense given the stock market's upward trajectory over the decades.

September is the real culprit. It's the only month with a negative average return over the long run. Good thing it's already behind us this year. And without any major incidents.

Of course, all these long-term statistics offer little comfort when you're in the middle of a market sell-off. We had several of those this October. The hardest hit were stocks tied to artificial intelligence that had previously enjoyed spectacular gains. From the big tech names to semiconductor and chip manufacturers, and even construction equipment makers whose machines are needed to build out data centers.

Would You Have, or Did You?

These periods remind us why it's wise to spread our investments across different areas rather than betting everything on a single theme. Solid dividend-paying stocks provided a welcome counterweight, with some gaining by double-digit percentages.
Whenever a particular investment theme captures everyone's imagination, I hear the same argument: “I'd still be sitting on a handsome profit if I'd invested exclusively in those highfliers.”

But we live in the real world, where what you actually did matters more than what you might have done. Plenty of people wish they had owned those stocks. Very few actually did.

Why Is That?

A stock often catches our attention only after its price has already skyrocketed. Think of defense contractors in 2025. Or memory chip manufacturers a few months ago. Anyone who jumped in at that point is now sitting on losses of 50% or more in some of these stocks. And if you haven't done your homework beforehand, you're suddenly faced with a difficult decision. Sell, hold, or even buy more?

Investing Is Hard.

Anyone who thinks successful investing is easy simply hasn't been at it long enough. Whether you choose a wealth manager or decide to go it alone, you need to think things through, settle on a strategy, and make a commitment to yourself to stay disciplined. And you haven't even experienced the emotions that will inevitably come into play.

Even though I use artificial intelligence every day, I remain convinced of the value of talking to people who have devoted themselves to a particular field of expertise. By all means, do your research online with AI first. But when it comes down to it, I'd still rather sit down face-to-face with my doctor, lawyer, tax advisor, or, for that matter, my private banker at Gutmann.