Wednesday, May 31, 2017

Sell in May

The below is a Afterthought on a chapter in my book Complete The Art of Investing. Today the market is risky, so seasonal predictions may take a back seat.


Best profitable period is: Nov. 1 to April 30 next year. It is similar to the saying 'Sell in May and Go away'. It did not work since 2009 as it was Early Recovery in the market cycle.

The market does not always happen as predicted. However, when more folks follow, it becomes a self-fulfilling prophecy. I prefer “Sell on April 15 and come back on Oct. 15” to act before the herd. The more practical strategy is to start selling in April 1 and become more aggressive (selling at closer to the market prices) when it is close to May 1. For the last five years, I do not find this prediction reliable.

The explanation of the ‘summer doldrums’ could be the investors cash their stocks for vacations and college tuitions in the fall. Buying quality companies at the dips could be profitable. 

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