We've seen the October stock market crash before. Will we see another one?

October can be a scary month for the stock market. The famous 1929 Wall Street crash occurred in October. It was the same in 1987.

Could we see another October crash?

The stupidity of predicting the market

The short answer is yes. The stock market is cyclical. Soon we will see another crash.

That may come up this month. The pending US election, the uncertain economic situation and high tensions in the country made investors nervous not only in the City, but also on Wall Street.

However, there are no definite signs that the crash will come this October, this year, or this decade. I FTSE 100 hit a record high this year. He did so again The Dow Jones Industrial Average. He did so again S&P 500.

One might point to those records as signs of a bubble market waiting to burst. Alternatively, they may indicate that more money is available to investors who remain confident in the current valuation.

In other words, we now know when the stock market will crash next.

Acting 'as if' would be fine for a smart investor

However, learning about potential market crashes has more than theoretical value for the experienced investor, in my opinion.

One active application takes a moment to consider the distribution of my assets. For example, what is the balance between stocks, cash and other assets? Will I be in a position where, if the stock market crashes tomorrow, I will regret the investment I made? If so, now would be a good time to amend that assignment!

Another practical implication is to think about what stocks I might want to buy if a stock market crash brings their value in line with what I see as good value.

For example, consider Bunzl (LSE: BNZL). Selling mops and food containers may not sound like the most exciting of businesses to be in. But as the old saying goes, “where there is mud there is copper“. Cleaning products specialist Bunzl has helped its investors and customers to clean over the years.

The past five years alone have seen Bunzl's share price rise by 72%. If I had invested in 2009, when the last financial crisis sent stocks down, I would now be sitting on a return of over 580%. That doesn't include the dividend, which has grown every year for more than three decades.

Whether Bunzl can continue to do well remains to be seen. Many of its markets are commodity markets and in a weak economy, they may be undercut by cheaper competitors.

But what makes me stop buying Bunzl shares now is not risk, it's valuation. The company trades at an earnings ratio of 24. If a stock market crash makes valuations more attractive, I want to be ready to buy.

So I spend time now keeping an updated list of stocks that I would like to buy if they become available – even for a short time – at what I think is an attractive price.