The Ghana Stock Exchange experienced a rollercoaster ride in the month of September and it’s apt that October — a month associated with Halloween and all things horror, is one of the scariest months for the stock market and sure promises mixed results for investors.
As the Ghana Stock Exchange (GSE) gets into the depths of autumn and the weather gets gloomier, so too does sentiment on the local bourse as investors prepare to wrap up the final quarter of the year.
For investors on the Accra bourse, October brings a unique blend of opportunities. The planetary positions suggest a mix of both bullish and bearish trends. This means that it’s decision time, and one’s investment choices matter. Some tough calls might be on the horizon, but they could pave the way for a brighter financial future.
Experienced investors may be familiar with the idea that stocks have more than their fair share of ups and downs in October. Data has shown that average volatility in October has been 35% higher than the average for the remaining 11 months of the year.
According to historical data, composite indices of the local bourse have consistently posted average results exceeding a 1% gain per month from October to November. On the other hand, October performance has averaged just a 0.5% gain, with it being the worst-performing month averaging a loss of -0.8% across all three indices.
However, it’s worth noting that October can be a volatile month with significant swings in both directions. It holds the dubious honor of being the only month where majority of indexes have recorded losses of at least over 10% for the past 5 years. Conversely, it also has the tendency of witnessing the highest percentage gain of any month for the Ghana Stock Exchange.
Investors to Reevaluate Stock Portfolio
According to experts, investors must be prepared to reevaluate their stock portfolio and consider letting go of underperforming stocks to prevent losses. This month is all about looking at things from a different perspective to avoid losses. It is worth noting that the stock market is a bit sensitive, and turning a profit might be challenging, but with the right strategy, it’s not impossible.
However, if an investor is new to the world of stocks, this month might be in their favor. It’s an opportunity for them to enter the market and secure some good gains. It is advisable that they take it easy, though.
For intraday traders, October holds opportunities for profit. The market conditions are in their favor, but that doesn’t mean making hasty decisions. Using one’s trading skills wisely to capitalize on these favorable conditions, investors must strive for a balanced approach in their investment and trading activities.
Market seasonality is a valuable tool for investors, but it isn’t a foolproof indicator. Experienced market forecasters use a range of statistics to anticipate the onset of the next bull or bear market. As such, while October may historically be a month of significant market movement, investors should exercise caution and seek professional advice to navigate potential volatility.
As expectations are rife in the local bourse, key economic indicators such as inflation, interest rates and depreciation will continue to dominate the Ghana Stock Exchange headlines in October.
Amid all, mixed trends across sectors and buoyancy on the broader front are offering trading opportunities on both sides so participants are advised to continue with stock-specific approach, with focus on risk management.