S&P 500 showing spooky numbers in October

(MoneyWatch) If you've been reading my blog for any length of time, you know that data mining (or the act of messing with numbers to find specific patterns) should provide investors little more than a chuckle. While October has typically been a frightful month for stocks, a little data mining also shows the S&P 500 Index's devilish side. (Thanks to Howard Silverblatt of Standard & Poor's for the data.)

On Oct. 9, 2007, the S&P 500 closed at 1,565.15, the index's highest point in its history. Last week, as we approached the fifth anniversary of that high water mark, the S&P 500 closed at 1,460.93, or 6.66 percent off its historical high. This isn't the first time the S&P 500 has displayed the mark of the beast. During the market low on March 6, 2009, the index hit its lowest point of the recession at 666 before rebounding to close slightly higher.

Of course, this has no real bearing on your portfolio and shouldn't affect your investment strategy in the slightest. However, you should keep this exercise in mind anytime you come across an advisor or talking head who has teased a "money-making" pattern out of a data set. It's just as likely to be valid as the S&P 500 being influenced by the Devil or being predicted by butter production in Bangladesh.

Image courtesy of Flickr user Marshall Astor

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    Larry Swedroe is director of research for The BAM Alliance. He has authored or co-authored 13 books, including his most recent, Think, Act, and Invest Like Warren Buffett. His opinions and comments expressed on this site are his own and may not accurately reflect those of the firm.

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