For those who have seen the movie Great Gatsby, you have some appreciation of how sweltering the summer heat can be in New York City. For many decades, those who can afford to flee the city for the seashore have done so. The result is that there are fewer people doing anything on Wall Street. Therefore, it shouldn't be surprising that the stock market just saunters along without purpose during that time. Wall Streeters urge each other to "sell in May and go away."
There is some justification to this, as shown on this graph:
There is some justification to this, as shown on this graph:
You can see the gold line, representing performance of the S&P 500, is relatively flat-lined between May and November most every year. History suggests you should not expect much good news from Wall Street during the summer . . . nor bad news either. So, take the summer-off from your everyday worries about the sky falling, and . . . go to the beach!
But, don't sell everything before you go, as that would be market-timing, and we all know what happens to market timers. They miss it!
