“October: This is one of the peculiarly dangerous months to speculate on stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” – Mark Twain

The words “dangerous” and “stocks” used to be synonymous. That equities were a risky investment was a given.

All that seems to have changed. I was recently asked if it was safe to “park some money” in the S&P for “a few months.”

Why would someone think the S&P 500 can be used as a money market fund? Let’s take a look…

1) The S&P 500 has been positive (on a total return basis) for 11 consecutive months and 18 out of the last 19.

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2) That’s the longest streak since 1958-59.

3) At 5.4%, the annualized volatility in the S&P 500 over the past year is just about as low as it’s ever been. For some context, the historical annualized volatility for the Barclays Aggregate Bond Index is 5.4%.

4) The Volatility Index (VIX) ended September at 9.51, its lowest monthly close in history.

5) The average VIX level in September was 10.44, by far the least volatile September in history. In terms of all months, it trailed only July of this year.

6) Intraday volatility during September was the lowest in history, with one 15-day span averaging only 0.31% (high to low in the S&P 500 as a %).

7) There hasn’t been a 3% pullback in the S&P 500 since last November (before the election), the 2ndlongest run in history.

8) The S&P 500 is on pace for its 9th consecutive up year, tying the record run from 1991-99.

9) As we start October, every major U.S. equity index is hitting new all-time highs.

Does all of this imply that the S&P is indeed the new money market? Is it “safe” to “park your money” there for a few months with the expectation that it will only grow?

Hardly. The absence of risk does not mean the elimination of risk, just as the absence of rain does not mean there will never be another storm.

Explaining that to investors can be trying at times, and perhaps no more difficult than today. Selling prudence in a risk-free world is akin to selling ice to an Eskimo. No one seems to want it or need it.

Only after risk rears its ugly head will prudence be back in demand.