by MN Gordon
“Sell in May and go away,” goes the old Wall Street adage. The general rule is to sell stocks on May 1, hold cash through the summer and into the fall, and then re-enter the stock market on Halloween Day. This certainly has a right ring to it…May and away even rhyme. But what if it has a wrong outcome?
“Waiting until May Day runs the risk of selling at the same time that a large number of other investors are doing the same,” notes Mark Hulbert of Hulbert Financial Digest. Perhaps the right time to sell isn’t May after all. Maybe it’s better to front run the trend and sell in April. But how can we be sure?
“Fortunately, we have real-world data on two attempts to get a jump start on the ‘sell in May and go away’ pattern. The first is the ‘Almanac Investor Newsletter,’ edited by Jeffrey Hirsch, and the other is Sy Harding’s ‘Street Smart (Read More....)
. . . → Read More: The Best Time to Squirrel Away Some Nuts
The current economic downturn is often called the worst since the Great Depression. Inspired by the ideas of John Maynard Keynes, 1930s leaders such as President Franklin Delano Roosevelt sought to stimulate the economy by initiating massive construction projects. Today’s economic situation has renewed speculation that a program similar to Roosevelt’s New Deal is called for. How would such an effort look today?
Parallels Between the Current Economic Downturn and the Great Depression
The Great Depression was preceded by an irrational level of stock market speculation, similar to that of the mid-2000s housing market. Both events were accompanied by a banking crisis. Federal Reserve efforts to increase the nation’s money supply were nullified by cautious behavior from consumers and banks on both occasions. Efforts to enact social safety nets and public works projects were opposed in both decades (Read More....)
. . . → Read More: A New Deal for the New Millennium