Sell in May and Go Away?

These past few months have been filled with headlines that have led to volatility we haven’t seen in recent years.  With the volatility and performance of the market to date being less than ideal, you may be considering the old adage, “Sell in May and go away.”

Does this seem like a reasonable idea?  We don’t think so. If anything, it can actually serve as an opportunity to invest at lower prices since early 2018.  You still have to consider where you invest and in what percentages, but with a long-term investment horizon the market historically rewards patient investors.

Given all the political headlines we’ve been reading over the last months I thought it appropriate to look back at a post we wrote last year.  In the post we highlighted how it’s important to be aware of who has your attention. This can be who you like to listen to, read articles from, and watch.  Keeping a balanced stream of news so you understand and learn for yourself rather than taking a headline for face value is really important.  And doing so will affect your portfolio if you act on the news you’re reading frequently.

Since the height of the volatile swings we saw in the past couple months we are encouraged by earnings that have been reported in the last few weeks.  There have been really strong earnings reported by so many companies, which provides insight into these company’s health. There has also been progress on the geopolitical front as well.

Of course there are still geopolitical issues that need resolved, like trade, but progress seems to be happening.  And we are all still paying attention to how quickly the Federal Reserve will raise rates. However, it does seem that in the midst of the headlines progress is being made.  Even in the face of higher interest rates the economy and market could continue to move in positive directions. For these reasons we don’t encourage you to “Sell in May and go away.”

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