Sell in May? No way

Here is a piece of stock market advice that has apparently worked in the past.  “Sell in May, and go away.”  And return after Labor Day.

If investors had followed this adage during the recent summer months, June through August, they would have missed out on a great rally.  The Dow alone gained 5.6 percent, turning its anemic gains for the year to a solid 7.1 percent.  In other words if you’d sold out on May 31, you would have lost $5,600 for every $100,000 invested.

Back in May, I decided to stick with the market.  Not to sell, not to buy, but to hold to what I had.  By then the stock market had already been good to me, thanks to buying Apple at the low price of $379 a share last November.  It is now selling at $665.  That is a nice gain of 75.4 percent in about 9 months.

And over the summer my portfolio advanced by 8.3 percent to 15.2 for the year to date.  So during that time my personal gains came to almost double.

The bubbling tech stocks, the NASDAQ, increased by 8.5 percent over the summer and the standard S&P 500 went up 7.4 percent.

This was one of those summers when it didn’t pay to stay away.  Sometimes you just have to get a feel for the market and let the old saws take a breather on the sidelines.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s