Thursday, October 2, 2014

Will the Stock Market Finish 2014 With a Bang or a Crash?

Fortune teller Cora Reed/Shutterstock For more than five years now, the U.S. stock market has mostly soared upward as the global financial system emerged from the wreckage of the housing bust, the banking crisis and the ensuing market meltdown. Yet several looming threats could put the brakes on those gains, and investors appear increasingly nervous about whether stocks will keep providing the returns they've grown accustomed to. Let's look at what the rest of 2014 is likely to bring. The Halloween Scare October routinely scares many investors, and despite the irrationality of many seasonal investing strategies, it's easy to understand why with a simple look at history. The Crash of 1929 that many blame for setting the stage for the Great Depression occurred in October, as did its 1987 successor, which featured the largest single-day percentage drop in the Dow Jones Industrials (^DJI). Over the years, other minor market disruptions happened during October. And while the last financial crisis started gaining momentum in the summer, October 2008 produced two of the five worst days in history for the Dow in terms of point declines.

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