News from Reuters. A chief acolyte of the sell-in-May school is Jeff Hirsch, editor of the Stock Trader's Almanac. He has analyzed data from 1950 through 2008 and determined the following: In the years since then, the Dow Jones Industrial Average gained an average 7.3 percent for the November-through-April periods. Total returns during the May-through-October periods were barely positive, at 0.1 percent.History doesn't always repeat itself.
However, .....the sell-in-May axiom doesn't always hold true.
My view. Over the long term the finding is true. It is a warning sign that the markets may disappoint. They become a trader's environment during the summer months.
What happens in summer depends on valuations, monetary policy, direction of interest rates, the trend of financial risk, and unemployment claims.
Some years these trends are market friendly, and stocks rise in summer. When they are unfriendly, stocks decline. On balance, over the long term, the returns are close to zero.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
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