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Switch It Up This Year: Buy In May, Till November Stay

TedTed
in Fund Discussions
FYI: "Sell in May and go away" is perhaps the oldest saw on Wall Street, but it appears there's no shortage of U.S. mutual funds doing exactly that this year.

After all, the S&P 500 .SPX has delivered a total return, including reinvested dividends, of 10.8 percent over the last six months, essentially capturing all of the average rolling 12-month total return on the index since 1990, so why not cash in?
Regards,
Ted
http://www.reuters.com/article/us-usa-stocks-weekahead-idUSKBN18M2DW

Comments

  • beebee
    From the article:
    To sell we'd need a Fed that's more hawkish than expected mixed with economic data that's weaker than expected. That combination could give us a domestic stock sell off this summer.
    Economic data is coming through weaker than expected according to Nancy Lazar from a recent Wealth Track interview:

    top-ranked-economist-nancy-lazar-discusses-the-prospects-for-the-u-s-economy
  • hank
    edited May 2017
    Hi @bee. Don't know about it being a tedduplicate since the sources and experts cited are different. But yes, the theme seems to be the same. Unfortunately, I hadn't followed the thread you referenced. We're still getting all our horse & buggy internet (rural area) over 4G and pay by the GBs consumed. Sometimes, especially late in the billing cycle, I skip the videos to conserve data.

    Regarding the article itself ... Since I don't subscribe to the S-I-M or other systematic timing strategies, linked the article more to show there are contrasting points of view on this - rather than as a serious macroeconomic viewpoint. However, as an aside, I do continue to think valuations are rich among many (possibly all) risk assets, so have been holding an elevated amount of cash and short duration bonds for a number of months (not related to its being May). Just one fella's humble opinion. And, I'm well aware that periods of overvaluation can persist for many years.
  • Sven
    @hank and bee, I watched Nancy Lazar interview as well and think she has several good points.

    YTD of foreign markets (both developed and EM) have done better than US market while their valuation are more reasonable. Likelihood there maybe more room to expand further in these markets. I rebalanced several time out of US into foreign markets and they have done well since the France election.

    Earlier in the year the Fed is planning three more rate hikes. Market reacted positively with the first hike. The second Fed meeting in June where they can decide for a second rate hike. Employment data has reached full employment and inflation is heating up. Perhaps June hike is more more real than it was posted earlier this year. Will the market reacts the same ?
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