October is often a scary period for S&P 500 investors. But it doesn't have to be that way.
A dozen S&P 500 stocks — including health care plays like Centene and UnitedHealth plus consumer discretionary stock Deckers Outdoor — topped the S&P 500 during October in each of the past five years, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. What's more, these stocks posted an average gain of 3% or more in the month.
That may not sound like much. But it's a victory during the month of October. The investment term "Octoberphobia" exists for a reason, says The Stock Trader's Almanac. The month has witnessed some of the ugliest crashes in history. The market tanked in October in 1929, 1987, 1997 and 2008.
October Isn't Horrible, Except For The Crashes
The funny thing is, October as a whole isn't terrible for investors. It's not the worst month anymore.
The month now ranks as sixth worst for the year, says the Almanac. The S&P 500 actually rose an average of 1% during October going back to 1950. But in election years, things are a little worse with an average fall of 0.9% for the month.
And recently, the month has been a wild card. The S&P 500 actually rose 1.5% on average in October going back five years. But that's swung from an 8.1% gain in October 2022 to a 7.3% loss in October 2023.
What are some of the stocks that dodge the October drama?
Winners In October?
Centene, which provides health care support to uninsured families, is the consistent winner. It delivered an average monthly gain of 12.1%. That's more than any other S&P 500 stock.
What's more, shares of Centene have never fallen during the month of October in any of the past five years. The stock shot up nearly 13% in October of last year. Investors like the company's durable profit during a volatile month like October. Centene sports an EPS Rating of 88. It's important to note, though, that analysts only see 2% earnings growth in 2024.
A similar story in October is UnitedHealth. Shares gained an average of 10.9% in October on average in the past five years. It, too, is a health insurer with solid fundamentals. Its EPS Rating is also 88. Analysts are calling for 10% earnings growth in 2024.
Looking Forward To Better Times For S&P 500
If there's good news this month, it's this: October tends to end the S&P 500's worst six months, the Almanac says, calling the month a "Bear Killer."
"With September ending, we're now entering what has historically been the best three-month stretch of the year for equities," said Bespoke Investment Group. "Over the last ten years, the S&P has seen a median forward three-month gain of 7.8% as of September 30th. No other day on the calendar has seen a better forward three-month return."
Best S&P 500 Stocks In October
| Company | Ticker | Avg. Oct. gain | Sector |
|---|---|---|---|
| Centene | CNC | 12.1% | Health Care |
| UnitedHealth Group | UNH | 10.9% | Health Care |
| Deckers Outdoor | DECK | 10.5% | Consumer Discretionary |
| Elevance Health | ELV | 10.5% | Health Care |
| W.W. Grainger | GWW | 8.4% | Industrials |
| Paccar | PCAR | 7.4% | Industrials |
| Molina Healthcare | MOH | 6.8% | Health Care |
| A.O. Smith | AOS | 5.9% | Industrials |
| Hilton Worldwide | HLT | 5.7% | Consumer Discretionary |
| Copart | CPRT | 4.9% | Industrials |
| Bank of New York Mellon | BK | 4.1% | Financials |
| PNC Financial | PNC | 3.3% | Financials |
