Equities: time to sell or time to buy?

[MichaelB]

We are now beginning the other end of that "Sell in May" cycle, the most bullish time of year. Add to that the election cycle, also bullish for equities.

Suppose I told you there is a technical indicator that, once the buy signal was given, has an amazing record--with the S&P 500 up three months later 17 times out of 18 since 1942, up six months later 18 times out of 18, and up 12 months later 18 times out of 18. The only condition this technical indicator has to meet is a particular political-calendar date, i.e., mid-term election day, which happens to be tomorrow. Buying on that day is one of the best technical strategies I have ever seen. One has to go back to Depression-era market losses to find two periods when this indicator did not give consistently positive results. The historical odds are almost 100% in your favor. The average percentage changes are also good since 1942: 8.5% for the three-month periods, 15.0% for six months, and 15.6% for 12 months. Dr. Ed's Blog: Congressional Cycle Is Bullish (excerpt)

 

[Senator]

I am all in.

 

[NYEXPAT]

Reminds me of the old Wall St adage "Today is the hardest time to buy stocks"!

 

[FIRE'd@51]

This is interesting, and Ed Yardeni is an influential economist. It makes sense since the opposition party tends to pick up seats in mid-term elections which tends to increase gridlock (except for legislation which everyone agrees upon) and the market loves gridlock.

 

[LOL!]

The time to buy was a few days around October 16th. Apparently lots of folks did as noted in this thread: http://www.early-retirement.org/forums/f28/was-that-the-quickest-correction-or-what-74250.html

Right now it is time to hold.

 

[RetireAge50]

It is always time to buy stocks. They double in value every 7 years or so on average. Or maybe you were talking for a short term strategy?


Sent from my iPhone using Early Retirement Forum

 

[ripper1]

BUY.....BUY....BUY......We are in a secular bull market...In my opinion.....1982-2000 comes to mind.

 

[jebmke]

I am right about at my target allocation (40%).

 

[brewer12345]

My target is for equities to stay between 60 and 65%. I bought heavily in foreign equities and a few favorite names that got savaged during the downturn. With the rebound, I ended last week back at 64% equity. A few more up days and I will be looking to lighten up a bit.

 

[nun]

Is it time to buy or sell...... Yes!

I look at my AA on the 1st of every month and rebalance if it is +/-5% out of spec. My AA was 60/40 on 1st Oct and the same on 1st Nov. apparently there was some volatility in the markets that I missed.

 

[Animorph]

As far as timing the market, I'm not buying unless the market is down 20%.

I'm happy to reinvest distributions, DCA, or make normal monthly contributions at this time.

 

[dallas27]

Japanese market is up another four percent today.

8% in two days. Asking the question of when is poor strategy. Get invested, stay invested. If you see an opportunity thats better, reallocate, but stay in the game.


Sent from my iPhone using Early Retirement Forum

 

[Rickt]

100% invested in stocks and staying the course for next 3 months+

 

[38Chevy454]

I think it is time to buy. Given election results may give Republican advantage, that will lock up Washington DC tight for next couple years. This is generally good for markets, they like stability and gridlock is stability in their eyes. As result it should be a good ride for next 1-2 years in the market. It should also help the excessive federal spending some which has good perception by the market.

I am still essentially 100% stocks in all my savings and will stay there for a while, especially if my Wash DC forecast holds.

 

[MichaelB]

Just a reminder - mentioning the election cycle in the OP was not an invitation to discuss politics.