The October Effect Story


The October Effect story:

The foundation of October Effect, Ltd. is active asset management with an eye on limiting risk.  The events leading up to the need for October Effect Ltd. include

¨ the bear market in the fall of 1982 

¨ The quick and terrorizing market correction in October 87. 

¨ The fall of the internet innovation technology in 2000,

¨ The self-created real estate balloon of 2008. 

¨ The unanticipated pandemic Covid 19 market fiasco of 2020.

These events confirm that risk management is a primary component in your investment discipline.


October Effect, Ltd came into existence in November 2015 to fulfill this needed investment discipline. Using fundamental, technical, and quantitative analysis.  Our model portfolios provide an investment discipline aiming for consistent returns and avoidance of unfavorable market movement. Using a multi-disciplined approach, we truly believe that the three market movements; market moving up, market moving down and market holding sideways can be harnessed to achieve a better long-term result for our clients.

 The philosophy:

A buy-and-hold philosophy has been accepted by much of the market.  It hopes to avoid a whip saw movement when the market goes down and then immediately turns the other direction.  You must also endure the painful decline in the buy-and-hold portfolio over long periods as your market segment falls out of favor. 


We at October Effect, Ltd.  strive to avoid unfavorable market periods.  Hoping to find those companies using new technology in the ever-changing world of global capitalism.  When conditions are appropriate, we do invest heavily, hoping to benefit from market movement.


Our investment approach incorporates the basics of asset allocation, with the foundation using dividend producing stocks for the long-term investment.  Open-ended mutual funds are used for those complicated markets requiring continual vigilance.   The ETF’s (Exchange Traded Funds) for active markets, incorporating momentum trends.   For market maximization we use both puts and call options giving growth in down markets, sideways and up markets.    Entire portfolios are then monitored using active management strategies, driven by tactical considerations.  Of course, it is tailored to the individual client and their unique situation.

 Why partner with

            October Effect, Ltd:


Experience:  Our investment committee has over 100 years’ experience in many volatile markets.

Unconstrained flexibility:  Our investment strategy allows us to invest anywhere needed to meet your investment goals; including but not limited to open-ended mutual funds, closed-end mutual funds, individual stocks, corporate bonds,  municipal bonds,  government bonds,   ETF’s, notes, many bank CD offerings, and derivatives including options.   This is important for in today’s fast changing market environment you must have the freedom to use any asset class when it’s required.

Advantages of a boutique firm:    October Effect, Ltd is a small-town firm with small town values ignoring the pressures of Wall Street. The ability to have a firm located outside of Wall Street’s pressures allows October Effect, Ltd the courage to act on its own observations thereby avoiding crowd mentality and allowing for independent investment choices which may protect you against catastrophic loss.

 The mathematics:

One of the major building blocks of October Effect, LTD’s investment philosophy is the importance of avoiding detrimental portfolio losses. All portfolios incur loss at some point in time, but it is extremely important to keep those losses manageable. The key to long-term investment success is managing the downside risk, which provides for your peace of mind.

The following simplified example examines the mathematics and advantages and disadvantages of risk avoidance.

                               A                     B                  C

year one            +19%           + 35%            +15%

year two           - 7%               -17%             +5%

year three         +14%            +18%            +14%

year four            -5%              -19%              +12%

The average investor would select investment B based solely on its larger return in year one, however, if you annualize the returns, the importance of avoiding a catastrophic loss becomes obvious        .

Annualized     A    5%         B   3%             C 9%


Reason for this outcome is simple mathematics, which many investors ignore.

Let’s say your account starts with $100,000.00 and you lose 50% in the first year. Your account is now worth $50,000, and in order to get back to its original investment you need a return of 100%. In contrast, if your account had declined 10% it would be valued at $90,000 and in order to get back to your original investment you would only need a gain of 11.1%.

Picking a portfolio manager for your hard-earned assets is one of the most important financial decisions you will make. We believe risk management should be a primary consideration.  We also act as fiduciaries in relationship to the portfolios entrusted to our care.

 Reference material:

Mathmatics-simple interest

“Riding the Bear” by Sid Harding

“The Only three Questions That Still Count” by Ken Fisher

“Conquering the seven faces of Risk” by Scott J Jones

“Chaos and order in the Capital Markets” by Edgar E Peters

“Profitability of Momentum Strategies: An evaluation of alternative examinations” academic study by Narasiman Jegedeesh and Sheridan Titman 2001

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