If you tried to read the title and thought that I might be typing gibberish, I assure you this a real word and is commonly known as the fear of Friday the 13th. Historians attribute the popularization to a novel published in 1907 aptly titled Friday, the Thirteenth. The fictional story was about a stockbroker who decides to attempt to manipulate the stock market and bring all of Wall Street down in a mega crash. The book generated such a fear afterward that the New York Times noted that stockbrokers had all but stopped trading on those days.
Many of the superstitions on Wall Street are based in part on anecdotal evidence and one time events that have happened in the past, and not upon decades of careful observation and statistical analysis. Every year around this time, you will start seeing articles speculating about the timing of the next big market crash. It just so happens that two of the most famous stock market crashes (1929, 1987) both occurred in October. Naturally, everyone assumes that October is the worst month for stock market returns, but that distinction falls to September, as shown in the chart below.
Having superstitions are certainly not contained to investors in the U.S. All cultures in our world carry fears, including ones about specific numbers and the financial markets. The Chinese characters for the numbers eight and four closely resemble the characters for prosperity and death, so studies have shown that many investors will favor investments with 8’s over those with 4’s. The opening ceremony of the Beijing Olympics was August 8th, 2008, at 8:08 pm.
So how can we, as investors, avoid falling into these types of traps or worse acting based on these types of superstitions?
As someone prone to numerical superstitions, it has been constructive for me to research if they hold up to the scrutiny of rigorous analysis. Merely taking these superstitions at face value, especially when dealing with our investing dollars can leave us exposed to unnecessary risk. Research and analysis are endeavors that I enjoy, but for most investors, it’s neither fruitful or productive to conduct this type of examination. Having a fiduciary advisor to guide you through the investment landscape will keep you from making a big mistake with your financial plan all the more critical.
So step on all the cracks you find, break mirrors, walk under ladders, and stare at all the black cats you see today. Enjoy the full-moon tonight; there won’t be another on Friday the 13th for thirty years. Until then, keep your focus on your long-term financial goals and leave the worrying about the next economic calamity to the talking heads and pundits.