Sell in May and Go Away?

[rols]

I had a phone call this morning from a friend of a friend who has been holding a portfolio since January and is in profit. He wanted to know if there was any merit in the old adage 'Sell in May and Go Away.'

I replied that IMO lots of these sayings have little merit apart from the fact that they rhyme and stick in ones head. 'A stitch in time saves nine" for example.

I then suggested his strategy could equally be,
'Don't sell too soon. Wait until June.'

Any thoughts anyone?

 

[counter_violent]

A bird in the hand
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does it on the wrist !

 

[Jack o'Clubs]

Tell him that if he hasn't been holding since St Swithin's Day it doesn't count!

 

[oatman]

If you wait 'til June
You're in monsoon. :cheesy:

 

[TWI]

When in doubt, get the f*ck out

 

[Chicken Curry]

When in doubt, get the f*ck out

Expressed with great clarity of vision if you don't mind me saying so twalker.

Well said indeed.

 

[TheBramble]

I had a phone call this morning from a friend of a friend who has been holding a portfolio since January and is in profit. He wanted to know if there was any merit in the old adage 'Sell in May and Go Away.'

While old adages, like stereotypes, exist for a reason, it would very much depend upon the specific constiuents of your 'friend's' portfolio.

It's all to do with geo-magnetic hotspots.

 

[Millano]

One of the indices... either the DOW or SnP... you can go back so many decades, and if you decided to buy it at a certain date and sell it on another date every year, you would have made huge profits. While if you buy/sold opposite at those two dates, you would end up with a negative return (yes, negative.... when they go up 10% per year).
I don't remember the dates... but the buy day is probably in November and the sell is in April, May, or June.
It's definetly not a myth. The differences in gains between the months over soo many years is just too much to be statistically insignificant.

 

[the blades]

I had a phone call this morning from a friend of a friend who has been holding a portfolio since January and is in profit. He wanted to know if there was any merit in the old adage 'Sell in May and Go Away.'

I replied that IMO lots of these sayings have little merit apart from the fact that they rhyme and stick in ones head. 'A stitch in time saves nine" for example.

I then suggested his strategy could equally be,
'Don't sell too soon. Wait until June.'

Any thoughts anyone?

Hello rols,

I've attached the relative UK sector returns (since 1994 I believe). I think there's something in this, but as with most mechanicla systems it would be very hard to follow. Sit out one season as things go gainst you, and you've got to wait another year to prove yourself right. Takes some doing, IMHO.

UTB

 

[roguetrader]

Hi rols, can't say I am a fan of any strat that is being bandied about on discussion boards and the media. and since I don't invest or long term trade, don't have much opinion either way, but for anyone who's interested here's an article I read recently.

http://www.marketwatch.com/News/Sto...9ED2-4A9535A5C9E4}&link=&keyword=MARK HULBERT

 

[rols]

Hello rols,

I've attached the relative UK sector returns (since 1994 I believe). I think there's something in this, but as with most mechanicla systems it would be very hard to follow. Sit out one season as things go gainst you, and you've got to wait another year to prove yourself right. Takes some doing, IMHO.

UTB

Thanks for your reply.

This + Merryn in the Sunday Times are leading me to finding an answer of sorts.
She says that according to the US Stock Traders Almanac those who 'sell in May and go away' historically do rather better than those who invest in the Spring:
"If you had invested $10,000 in the Dow at the end of April 1950, sold at the end of October and repeated this every year you would by now have made absolutely nothing. Had you bought at the end of October and sold at the end of April every year your pot would now be worth $534,323."

Does anybody have the corresponding figures from the UK Stock Traders Almanac?

 

[rols]

Thanks for your reply.

This + Merryn in the Sunday Times are leading me to finding an answer of sorts.
She says that according to the US Stock Traders Almanac those who 'sell in May and go away' historically do rather better than those who invest in the Spring:
"If you had invested $10,000 in the Dow at the end of April 1950, sold at the end of October and repeated this every year you would by now have made absolutely nothing. Had you bought at the end of October and sold at the end of April every year your pot would now be worth $534,323."

Does anybody have the corresponding figures from the UK Stock Traders Almanac?

Here we are again a year later and hopefully richer in all things.

"Buy in June and push up the balloon", perhaps?

 

[firewalker99]

Here we are again a year later and hopefully richer in all things.

"Buy in June and push up the balloon", perhaps?

My bet is the balloon will pop in June :|

 

[Splitlink]

I think that China is the stockmarket to watch. Everyone is gambling in it, it is like Wall Street 1929. If that blows, it will affect us all in one way or other.

Split

 

[new_trader]

I think that China is the stockmarket to watch. Everyone is gambling in it, it is like Wall Street 1929. If that blows, it will affect us all in one way or other.

Split

Yes, as one Economist said: "It just shows that everything is now made in China!"

(or something to that effect)

 

[Jack o'Clubs]

I think that China is the stockmarket to watch. Everyone is gambling in it, it is like Wall Street 1929. If that blows, it will affect us all in one way or other.

Split

There's a big 'well, they would say that wouldn't they?' factor in the attached article, but a few arguments on why a China market blow-up won't take us all with it....

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/30/cnchina30.xml

Not convinced personally, since fear and greed always a bigger factor than cold logic!

 

[firewalker99]

I think that China is the stockmarket to watch. Everyone is gambling in it, it is like Wall Street 1929. If that blows, it will affect us all in one way or other.

Split

Talking about China...:
http://jessel.100megsfree3.com/shanghaibubble.png

 

[firewalker99]

There's a big 'well, they would say that wouldn't they?' factor in the attached article, but a few arguments on why a China market blow-up won't take us all with it....

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/30/cnchina30.xml

Not convinced personally, since fear and greed always a bigger factor than cold logic!

The important thing to note is "Last week alone, 300,000 accounts were opened."... when everybody is jumping on the wagon, it's time to leave the train