Well, as luck would have it, immediately after my last blog on April 10th suggesting we were overdue for a 5% pullback, we happened to get one. To be clear, I’d rather be lucky than good and that was a lucky guess. As I suggested, this is very normal and not anything to try to plan around. We did see some improvement last week, but I think we’ll stay choppy here for a bit. Interest rates have shot-up in the market, so unless and until those rates can ease back down, expect volatility. The Fed rate decision will certainly be a closely watched event (hint: they are unlikely to raise or cut rates).
That brings me to the main point of the blog today. There is an old adage in the Investment world that says “sell in May and go away.” This isn’t hating on May. Its quite a nice month, BUT it does kick off the seasonally weaker 6 mo period of May-October. This is compared to the seasonally stronger November – April stretch. But, MOST of the weakness in the May-October is typically found in September and October. In fact, May has been higher in 9 of the last 10 years! Hard to suggest that May is the problem.
So, as you can see, old adages/rules-of-thumb/wives tales are no way to invest. May could turn out to be a great month (and often is), but I think we’ll continue to churn here for a while below all-time highs as we try to figure out the next direction for interest rates.
In the meantime, enjoy the great weather. School is close to being done for the year and then Summer will be here before you know it. And, no – Don’t sell in May.
source: Past performance is no guarantee of future results. For Illustrative purposes only and not indicative of any actual investment. Investors cannot directly invest in an index. Tracking #572880