"Sell in May": Still Makes Sense?
It's May. Is it time to sell your stocks? We're referring, of course, to the old adage: Sell in May and go away. The theory is that, as a general rule, stocks get choppy, at worst tend to sink from May through August - basically late spring, through the summer. When September rolls around, you're suppose to buy back in. It's not that this always holds true; just that it frequently does.
So should we sell this year?
Frankly, who knows? But besides selling, the other aspect of this time-honored advice might be worth noting: Go away. The point here is not only to sell, but to forget all about your stock investments. Enjoy the summer. Take it easy. Vacation. Go to the beach...etc.
So whether we sell or not, this idea of "going away" sounds intriguing, doesn't it? After all, we typically take time off from work, perhaps keep shorter work days, get outdoors and enjoy the fresh air and perhaps some invigorating activities. Who needs to be hovering over their investment accounts, worse, worrying about them, at such a relatively relaxed, even happy time?
Maybe we can come to some decision here, after all, in light of the implied argument here that summer wasn't made for work, but rather to rest and refresh. We can sell our stocks, if that's all we've got in our portfolio. On the other hand, if we've got a good mix of assets that basically balance in some reasonable manner, we might think of just letting the portfolio sort of ride out the summer. The latter requires a bit of monitoring of course, but the key here is to avoid tinkering or making any major moves - again, if there's a good balance that will offset any significant slippage in one of the asset classes you're holding (i.e., stocks, bonds, commodities, precious metals, real estate, cash, etc.).
Now that I think about it, these last few weeks, with gyrations upward and downward, then up again, then down again have required an extra measure of self-control and discipline. Though our portfolios haven't been whipped around much, nor have they lost very much (down a hair YTD), we do feel a bit put out by it all and could use some down time. So we release into the great unknown any grand schemes we might have for major restructuring to either take advantage of perceived opportunities or, on the other hand, any significant hedging we might consider to be sure our hairline losses remain thin and harmless.
Yes, the summer beckons. Who are we to resist its allure?
So, Portfolio: Behave yourself! We want to enjoy the warmth, the flowers, the fresh air, and all the rest. Keep your place as we divert our attention to lighter matters!
Would that it were so easy.
So should we sell this year?
Frankly, who knows? But besides selling, the other aspect of this time-honored advice might be worth noting: Go away. The point here is not only to sell, but to forget all about your stock investments. Enjoy the summer. Take it easy. Vacation. Go to the beach...etc.
So whether we sell or not, this idea of "going away" sounds intriguing, doesn't it? After all, we typically take time off from work, perhaps keep shorter work days, get outdoors and enjoy the fresh air and perhaps some invigorating activities. Who needs to be hovering over their investment accounts, worse, worrying about them, at such a relatively relaxed, even happy time?
Maybe we can come to some decision here, after all, in light of the implied argument here that summer wasn't made for work, but rather to rest and refresh. We can sell our stocks, if that's all we've got in our portfolio. On the other hand, if we've got a good mix of assets that basically balance in some reasonable manner, we might think of just letting the portfolio sort of ride out the summer. The latter requires a bit of monitoring of course, but the key here is to avoid tinkering or making any major moves - again, if there's a good balance that will offset any significant slippage in one of the asset classes you're holding (i.e., stocks, bonds, commodities, precious metals, real estate, cash, etc.).
Now that I think about it, these last few weeks, with gyrations upward and downward, then up again, then down again have required an extra measure of self-control and discipline. Though our portfolios haven't been whipped around much, nor have they lost very much (down a hair YTD), we do feel a bit put out by it all and could use some down time. So we release into the great unknown any grand schemes we might have for major restructuring to either take advantage of perceived opportunities or, on the other hand, any significant hedging we might consider to be sure our hairline losses remain thin and harmless.
Yes, the summer beckons. Who are we to resist its allure?
So, Portfolio: Behave yourself! We want to enjoy the warmth, the flowers, the fresh air, and all the rest. Keep your place as we divert our attention to lighter matters!
Would that it were so easy.
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