Sell in May and go away ?

[frayne]

I think I ask this same question about every year and always like to see the comments.

Well

 

[REWahoo]

Doesn't this belong in the dirty market timer's forum?

 

[NW-Bound]

No, here we do not sell but "rebalance".

 

[RetireAge50]

What does "sell" mean again? I'm not quite retired so am still buying. In fact, over the last 25 years I have rarely sold anything.

Looking forward to selling in maybe three Mays from now.

 

[A Bird In Hand]

I don't know about every year, but you did ask this in 2011: http://www.early-retirement.org/forums/f28/sell-in-may-and-go-away-55833.html

I really doubt the answers are going to change much, so while you're waiting you might as well review what people said last time.

 

[Andre1969]

I'll usually sell off a bit if the market runs up enough that I need to rebalance. And usually, I end up selling off some in the Spring. Although it's not always in May.

But I've always taken "Sell in May and Go Away" to mean that some people sell off EVERYTHING, park it in MM accounts or whatever, and then buy back in around September. I'd worry about being out of the market though, in case something good happened in that timeframe. And, I'd imagine that taxes and commissions could eat heavily into any profits.

 

[frayne]

Maybe I should rephrase the question to "Rebalance in May and go away."

 

[frayne]

I don't know about every year, but you did ask this in 2011: http://www.early-retirement.org/forums/f28/sell-in-may-and-go-away-55833.html

I really doubt the answers are going to change much, so while you're waiting you might as well review what people said last time.

Thanks ABIH, the mind is not as sharp these dazes !

 

[NW-Bound]

May is about over. Need to [-]sell[/-] rebalance fast, before it is June.

Seriously, I do not change my AA much nor go away, but always keep my eyes peeled for sector rotation. There are always sectors that go up and down, and I keep looking to rebalance between them.

 

[eytonxav]

I'll bet there are some on here who claim to never change allocation, but when the market drops big they come back and tell you how they took equity $s off the table and avoided the big hit

 

[MichaelB]

Change that tune and sell in June?

 

[braumeister]

If many people followed that rule, the smarter ones would sell in April.
And even smarter ones would anticipate that and sell in March.
Etc., etc., ad nauseam.

 

[NW-Bound]

I'll bet there are some on here who claim to never change allocation, but when the market drops big they come back and tell you how they took equity $s off the table and avoided the big hit

I actually did that in late 2008. I was holding stocks with very high beta, e.g. companies in material sectors that were heavily dependent on the growth of China's economy. If I did not sell, I would be in deep doo-doo. It was a major worldwide economic catastrophe back then, not your average summer doldrums.

And I can point to past posts when I was selling in late 2008, then rebought in different sectors in 2009.

 

[W2R]

Let's see.

As seems usual for rebalancers here, I have WRITTEN rules for when I can and should rebalance. I rebalance:

(1) every year during the first week in January, when I withdraw the year's spending money
(2) when my equity percentage falls below 42.5% or over 47.5%.

As of today, my equity percentage is at 46.73%. Nope, not time. (yawn) Time for a nap. Doing nothing is easier for lazy investors like me.

 

[NW-Bound]

Don't Wellesley/Wellington do all that rebalancing for its shareholders?

And by the way, they do that year round, and whenever they feel it's necessary I think.

 

[grasshopper]

I am done for the year finished taking LTCG for 2104, converted to Roth, now I just have to wait until December. I just hope VTI and VXUS throw no CG and have appropriate qualified dividend %'s. All my bonds/balanced stuff is in tax deferred/free accounts.

 

[W2R]

Don't Wellesley/Wellington do all that rebalancing for its shareholders?

And by the way, they do that year round, and whenever they feel it's necessary I think.

Oh, NW-Bound. The percentage equities in both at any given time is easily available and of course used in determining when to rebalance. Of course if someone has only ONE fund, then I guess rebalancing is no more an issue than if you had the entire portfolio in gold.

 

[target2019]

It is a fun topic. Here's a calculator to help you decide.
Sorry for the naked link.
http://www.moneychimp.com/features/monthly_returns.htm

 

[NW-Bound]

I was just asking, as I thought one would not have to do anything holding these funds.

As it is, I have to look at my Quicken screen every day, actually several times a day, to see how my individual stocks are doing. I enjoy it actually, just like I enjoy sweep testing my loudspeakers, and test meat thermometers.

 

[W2R]

I was just asking, as I thought one would not have to do anything holding these funds.

As it is, I have to look at my Quicken screen every day, actually several times a day, to see how my individual stocks are doing. I enjoy it actually, just like I enjoy sweep testing my loudspeakers, and test meat thermometers.

I just entered 0.3888 into the appropriate cell in the spreadsheet I use for rebalancing, since Wellesley was (as of 4/30) 38.88% equities. It's pretty easy. I only have 30% Wellesley and less than 1% Wellington. I love watching my funds go up and down, although I don't have any individual stocks to watch.

On the other hand, testing meat thermometers sounds incredibly boring. I'd rather browse Amazon.

 

[REWahoo]

Don't Wellesley/Wellington do all that rebalancing for its shareholders?

And by the way, they do that year round, and whenever they feel it's necessary I think.

Yep. I don't recall the last time I've had to do any rebalancing. With the bulk of the portfolio in the above two funds my AA hasn't varied more than a percent or two for several years.

 

[pb4uski]

I think I ask this same question about every year and always like to see the comments. ....

If you look at the growth of $10,000 of Vanguard Total Stock (as an example) from mid May to year end over the last 10 years, more often than not the 12/31/yy value is higher than the 5/15/yy value, so it seems like bunk to me. I'm an investor, not a trader.

 

[NW-Bound]

...On the other hand, testing meat thermometers sounds incredibly boring.

To a cook, testing meat thermometers for measurement speed is more exciting than NASCAR.

I'd rather browse Amazon.

 

[Andre1969]

If you look at the growth of $10,000 of Vanguard Total Stock (as an example) from mid May to year end over the last 10 years, more often than not the 12/31/yy value is higher than the 5/15/yy value, so it seems like bunk to me. I'm an investor, not a trader.

I think the theory, or myth, is that the market usually builds up in the early part of the year, but then stalls out in May and pulls back some, and doesn't really take off again until around September. So while the 12/31 value might be higher than the 5/31 value, August or September might be a good time to jump back in, and take advantage of some market timing. Of course, your mileage may vary...

 

[NW-Bound]

OK, so two of my covered call options just got sold. Over the weekend, I set sell orders on a couple of leveraged ETFs, which bounced like yo-yo, and that I bought recently as a lark.

The covered calls may, emphasis on may, limit my future gains, but one should not be too greedy, right? These ETFs are only 1% of my portfolio, and the gains on them are not enough to pay for gas for my upcoming 9K-mile RV trip, but it is fun when one buys low to sell high.

Much more fun and challenging than going to Las Vegas or the race track. As much fun but more lucrative (potentially) than testing meat thermometers.