Tuesday, May 07, 2013

Sell In May: Real Money


Via Business Insider.com.  What $10,000 would be worth if the money was out of the market between May 1 and October 31 of each year using the Dow Jones Industrial Average going back to the 1950's.

That being said, there are some years where this strategy does not work.  1995-1997, during the glory years of the last Bull, this strategy did not pay off.  It didn't pay off as recently as 2009 either.  So many people are talking about how this is a sure fire way to avoid a decline this year that I think there's a much higher probability than normal that we could see this not pan out in 2013.  Time will tell.




One thing I might add in here.  It is possible these old statistical patterns won't work this year.  However, stocks are up something like 4% in this last month and we're not extremely over bought short term.   That's a pretty impressive move by anybody's standards.  Anything is possible in this crazy market but it wouldn't surprise me to see us give some of this back at some point soon.  Not saying that's going to happen so I wouldn't sell based on what you read here.  {I don't give blanket advice anyway.}  Strong actions though often bring equally strong reactions.  Just file that little tidbit away.

0 Comments:

Post a Comment

<< Home