You've heard of the "January Effect," where investors sell stocks in December for tax reasons, only to buy them back in January, causing their price to jump.

Yet what about other months? Retailers, for example, have some seasons that perform better than others, simply because of the nature of the business. Some stocks even do better in October. Whatever the reason, investing based solely on the calendar is certainly not a Foolish strategy.

Still, wouldn't it be great to know ahead of time which stocks performed best at what times?

On Motley Fool CAPS, more than 115,000 members have weighed in on more than 5,400 stocks, awarding five-star ratings to the companies that most command their confidence. We've paired their opinions with data going as far back as five years to see which stocks perform best in each month. The following five companies seem to do best in October:


Market Cap

Avg. % Return-October

Avg. % Return-Rest of Year

CAPS Rating (out of 5 max)

YTD Return


$87.0 billion






$152 million





Continental Airlines (NYSE:CAL)

$1.2 billion





Allegheny Energy (NYSE:AYE)

$5.1 billion





B/E Aerospace (NASDAQ:BEAV)

$977.4 million





Sources: America Online, Motley Fool CAPS.

What has driven the outsized October performance of Allegheny Energy, an eastern U.S. power-generating utility, while the rest of the year barely spins the meter? It's hard to say, which is why we don't recommend using this as simply a list of stocks to buy or sell -- just a platform for further research. But if October really is the month these stocks scare up growth, let's see which of the companies above might live up to that promise.

Airlines have been struggling because of soaring fuel costs and other expenses, which led many to begin nickel-and-diming their passengers for everything from second bag check-in fees (and first bags, too), to meals, drinks, and even pillows. Warren Buffett's admonition against investing in airlines and Southwest Airlines' (NYSE:LUV) reluctance to hit up passengers for spare change hasn't deterred one brave CAPS member. Despite the challenges, malteholm finds Continental to be an industry leader that ought to grow in worldwide markets.

Airline business is tough with current oil prices and heavy downturn in the world economy, but this one has shown massive potential with their ever improving concept, always defining new business standards. Great leadership, and now leaving SkyTeam to join StarAlliance which could help this company get more marketshare and customers from the European market.

CAPS members generally recognize Oracle as an industry leader, along with companies like Apple (NASDAQ:AAPL) and Cisco, whose shares have been under pressure lately. All-Star PuddinHead42 wrote last month that even with the drubbing the market was taking, Oracle managed to maintain its composure.

(9/15/08) Market has been murdered today and [Oracle] still has support at $19 where it has been sitting for days. To me that spells relative strength.

Similarly, CAPS member scuter69 figures that the share price will rebound once investor favor rotates back into technology stocks, though it might not happen for a few quarters.

This market leader just doesn't get any respect. [They] just dominate their space quarter after quarter. As technology rotates back into a leadership role in the next two quarters, this company will lead the way.

A calming effect
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Your voice affects these stocks, whatever month the calendar may display. Since it's free to sign up and express your investing opinions, why not use this opportunity to take your star turn?

On Oct. 7, 2008, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.