Tag Archives: Seasonality

Why October can be a Bumpy Month … Halloween? No

Our content in this venue is sometimes informative (we hope), sometimes clarification of headlines, sometimes educational, sometimes humorous and self-deprivation, and in this post more of a diary for our own education and collective remembrance.

Why October can sometimes be spooky for Capital Markets?

Probably the spookiest October that many may only read about is October 1987, but long-term historians will note that while the fourth quarter is generally a good quarter for capital markets (likely not the case this year with a FOMC yielding an interest rate rocket – ok, digressing), October can be rather spooky.


Year End for Many Mutual Funds – A very large number of mutual funds in the order of North of 20% have their year-end in October. This creates unique pressures across-the-board both on stocks that have done bad and false increases on stocks that maybe have done good as mutual funds close their books down for the year. As a sidenote last month, September garnered over 10%-year end mutual fund companies.

Black Out – With the official start of earning season being early October, publicly traded companies are restricted from purchasing their own stock. As of the most recent reading approximately 30% of exchange volume was estimated to be company buy backs…. Yes, your read that correct…30% of daily volume … Wow! Once the black out commences, by law companies are no longer allowed to purchase their company stock until a certain date after their public filing. The purpose of this is of course to cut back on any perceived manipulation. This absence of a normal one third volume of trading can make for “thinner” markets and spookier.

Confession Time – The Clock has run out – Publicly traded companies, many of which are on a fiscal year (tax year ends 12/31), the final quarter becomes the quarter of confession especially If earnings are skewed much differently than what capital market participants expect. This force is a pseudo-named “Confession”, as the calendar has just run out of rope forcing the final grade for the year in some cases.

Seasonality – As mentioned above, weird things have happened in October, creating a weird feed back loop. This means, that by knowing sometimes things can get spooky in this month, market participants and thereby Capital Markets can get spooked easier!

Mix it all up and we get a witch’s Brew of spooky times in October. 

But guess what?

We have let you know in advance, and we are not calling for a Spooky month, but there is a reason this post/memoir/diary is coming out now…. Just after a few spooky huge up days in Capital Markets…

Boo… We have your back!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Q 3 2021 Review – Let the Taper Begin, Interest Rates, Bumpy Season

Let the Taper Begin

In late 2018 the FOMC learned a valuable lesson that they are intent on not repeating.  At their most recent FOMC meeting Jerome Powell, chair, made it very clear that the large monthly asset purchases, $120 billion to be exact, will begin to be tapered.  Powell also made it very clear that the eventual raising of interest rates would not occur until the taper was complete unlike the events of 2018 in which the FOMC tapered and increased short-term interest rates at the same time, much to market participants dismay.

Bottom line if all goes well scheduled monthly asset purchases will be trimmed and eventually reach zero sometime next year.

Interest Rates

The most widely followed interest rate, the 10-year US treasury, after having a startling move earlier this year from under 1% to over 1.7% dropped back down to the low 1.2% during the most recent slowdown due to the variant.

Whether Powell’s comments, or the turning of the variant, interest rates have taken note and moved up smartly to over 1.5% beginning the normalization of higher interest rates which is very good long-term for the financial system

Kyle Bass Predictions

In our Q4 Newsletter we noted some very positive predictions from local financial mogul Kyle Bass, namely oil reaching $100 a barrel before the year end and continued Federal Reserve protection along with a push through to the end of the variant.

Hopefully all of these predictions come true.

The Worst of Times the Best of Times

September and October tend to be the most challenging months for Capital Markets mostly due to large institutions, think Fidelity as an example, closing their books on the year which make for more volatile times. So far, this theme seems to have played true.

The good news is notwithstanding our 2018 example from above, November and December tend to be some of the better months of the calendar.

As we head to the end of the year, we will be watching all of these and many other things very closely and will be communicating live on our blog at street-cents.


John A. Kvale CFA, CFP

Founder J.K. Financial, Inc.

Seasonal Patters Exist, Farmers Almanac, Traders Almanac

Growing up on a farm, we were always conscience of the coming season. The change would come whether we liked it or not (never big fan of the dark months ..Feeding the Cows in the dark, Ice Storms, Sleet, Brrr) but we knew they would eventually come and if we did not like the coming season it would eventually work its way through on to the next season.

This was tracked by The Farmers Almanac!

Of course we never knew just exactly when, how bad … and sometimes it would even seem like it was not coming, but it would… frequently of differing severity, but at the absolute least rhyming with the season from the prior year.

Just like Summer, led to fall and fall to Winter and so on…. believe it or not, Capital Markets have seasonality too!

The Traders Almanac

Not living on a farm anymore, and having a fun occupation that entails Capital Markets, it is worth noting of the Seasonality of Capital Markets….

According to the Traders Almanac October followed closely by September are the worst two months of the year…. among many other seasonal patterns…

  • Mutual Fund End of the Year Occurs during this period
  • Public Company Final Quarter projections confession
  • Lack of Cash Flows Due to Nearing the End of the year
  • Black Out Periods of Buybacks due to earnings season
  • Religious Holidays
  • Quadruple Witching (Expiration of 4 Different Options Type contracts) One of largest ever last Friday

Any or all could be the reason some or maybe none…..

Pair this with extended valuations which we have been beating you with and maybe a FOMC that is sending smoke signals of tapering asset purchases….

It may be bumpy for a while….

But guess what?

Just like knowing on the farm that in December the days began getting longer, November and December are “Seasonally” the best months of the year for Capital Markets …. of course there are exceptions (2018) …

Stay buckled, we have you covered but there may be some turbulence if seasonality holds!

Have a Great “Farmers/Traders Almanac” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.



Seasonal Choppy Markets — Newsletter Preview —

This week we finish Quarter three of 2015, some might say with a bang … some might say a bust. While we are not huge fans of seasonality or rhyming trends — sometimes the facts are just the facts and we have to yield to history.

The last several weeks of September and October “historically” are rocky times for capital markets. So far, this trend has played out again this year, which may mean choppy waters into October (FYI -the final full quarter is “seasonally”  the best.)History Repeats

This is of course a small speed bump in the long run plan to prosperity, but since we may see it on the horizon, we wanted to warn anyway! We have been warned — buckle up !

Newsletter Preview

With an editor who has been on the road — the newsletter took form a bit earlier in the quarter than usual –

  • Inheritance Facts, Figures and thoughts
  • Energy Sector update
  • When NOT to file an insurance claim- credit.com full article
  • Great market updated thoughts and a peek inside some of the items we watch – lots of graphs to help visually explain

There is even more coming soon in the Newsletter – We look forward to sharing soon!

Have a Great Monday !

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225