Sell in May this year?

[Rustic23]

I am not what anyone would call a stock market wonk. Now that I got that out of the way, on to sell in May. The stats seem to say that this is a good strategy. Not always, but enough that my conservative side is tempting me. I did not last year, because I figured the market was down so bad that it did not make since.

So the question is how about this year? If you are a 'sell in May' type guy, is this a hold year or sell year?

 

[kumquat]

For me, it's a sell in May year. YMMV.

Disclaimer: I will be selling a lot in May/June or before, since I have a lot of vested options in former mega-corps's stock that I must exercise or lose before June 30.

 

[Nords]

I am not what anyone would call a stock market wonk. Now that I got that out of the way, on to sell in May. The stats seem to say that this is a good strategy. Not always, but enough that my conservative side is tempting me.
So the question is how about this year? If you are a 'sell in May' type guy, is this a hold year or sell year?

May 2001, 2002, 2008, 2009: "I'm going to sell because no one has a job, their homes are all being foreclosed, the banks are all going to be nationalized, the dollar will be worth less than toilet paper, and the market sucks!"

May 1999, 2000, 2003, 2004, 2005, 2006, 2007, 2010: "I'm going to sell because the market can't possibly go any higher!!"

Either way you're right.

Besides "sell in May" is so much more pleasing to the ear than "buy & hold in November"...

 

[Eagle43]

Well, considering the recent meltdown, I think it's a good idea to lock in what you can. So, I'm planning on selling this year's gain in May. The market always goes up, until it doesn't. My buy and hold strategy has changed to a buy and try to keep it strategy.

 

[73ss454]

Heh, if I didn't sell during the last down turn I don't think I'll ever sell again. At least until I need some money to spend.

 

[tinlizzy]

My buy and hold strategy has changed to a buy and try to keep it strategy.

Mine too.

When to sell is the $64,000 question! There was that huge run up in September that scares me. Are all those buyers going to sell when they hit the LTCG tax range?

 

[audreyh1]

Sell in August!

August 10, 2010 to be precise. That is when the next major down leg will start, and it's predicted to be a doozy : 2010 Bradley Turn Dates | Bradley Siderograph | Astrology, Donald Bradley, Arch Crawford & Peter Eliades

The Mar 1 turn date prediction was pretty good - that is the day animal spirits started in earnest. This article implied it was supposed to turn down, but it was supposed to change direction strongly according to other folks. Bradley Turn Date is Upon Us - Mark W. Guthner, CFA -- Seeking Alpha

You never know about these predictions, but 8/10/10 sounds as good as any to me. That is perhaps when people will realize that the second half economy ain't looking so hot.

Audrey

 

[73ss454]

Maybe so Audrey, one never knows. Only thing I know is that any time I try to time the market I'm usually wrong. I'm just going to sit, close my eyes and hope for the best. I guess that's why they make PT jobs.

 

[REWahoo]

Heh, if I didn't sell during the last down turn I don't think I'll ever sell again. At least until I need some money to spend.

Yep. Some folks came VERY close to selling at the bottom but managed to hang on.

Once again, I'm happy with my AA and I'm sticking with it. Probably.

 

[73ss454]

Yeah, can you imagine that some people were really going to sell at the bottom, what were they thinking!

 

[audreyh1]

Maybe so Audrey, one never knows. Only thing I know is that any time I try to time the market I'm usually wrong. I'm just going to sit, close my eyes and hope for the best. I guess that's why they make PT jobs.

Oh - I'm horrible at it too!!!! The above is just for fun!

That's why I own a bit of everything and just rebalance when things get out of whack.

Audrey

 

[FIREd]

I have been selling equities steadily since the beginning of the year and will continue to sell as long as the market holds up. That's because I have way too many vested options that are well in the money and messing up my AA. I also will have to make changes to my portfolio in advance of changes in the tax code coming in 2011. That means selling a bunch of dividend-paying stocks that I hold in my taxable account, though I don't really know when I am going to pull the trigger on that.

 

[haha]

I have been selling equities steadily since the beginning of the year and will continue to sell as long as the market holds up. That's because I have way too many vested options that are well in the money and messing up my AA.

C'est dommage!

 

[rescueme]

C'est dommage!

Yes it is.

As for me?

Je n'ai rien fait durant la récession ...

 

[NW-Bound]

My AA is a tad short of 74% equity. Time to [-]sell[/-] rebalance?

I feel like [-]gambling[/-] taking some risks. It makes life exciting!

Sell in May? How did that work out in the past? What was the record? And what if it is "different this time"?

 

[MichaelB]

I am not what anyone would call a stock market wonk. Now that I got that out of the way, on to sell in May. The stats seem to say that this is a good strategy. Not always, but enough that my conservative side is tempting me. I did not last year, because I figured the market was down so bad that it did not make since.

So the question is how about this year? If you are a 'sell in May' type guy, is this a hold year or sell year?

If you did sell, what would you do with the proceeds?

 

[Rustic23]

If I sell in May, I would leave the money in money market till Nov. then back in the market..... or maybe not, depending on how things looked in Nov. While this may be market timing, I think of it more a trend following.

 

[nun]

Whenever my taxable account gains 10% I cash it in and pay down the mortgage.

 

[MichaelB]

If I sell in May, I would leave the money in money market till Nov. then back in the market..... or maybe not, depending on how things looked in Nov. While this may be market timing, I think of it more a trend following.

Problem is, things always look better or worse than they really are, it's really hard to tell which it is at any time, and that will be no different in Nov than it is today. It's more effective to have a plan and just stick to it.

 

[MuirWannabe]

If I sell in May, I would leave the money in money market till Nov. then back in the market..... or maybe not, depending on how things looked in Nov. While this may be market timing, I think of it more a trend following.

While this may be market timing??...yeah, that is the definition of market timing.

Not that that's a bad thing. If it works out for you.

 

[Rustic23]

Weather it is or it is not does not move this discussion on. This article explains it.

Halloween Effect (Sell in May, Go Away) - CallWriter's MONEY newsLETTER

I have not found a good analysis of when it did not work. I know it did not in 2009

 

[audreyh1]

There have been many years where it did not work - more of them recently. It's one of those things that so many people are aware of it, it doesn't work as advertised - either not at all, or investors "front-run" the time period so the timing gets skewed.

Audrey

 

[W2R]

If you did sell, what would you do with the proceeds?

Good point!

Yep. Some folks came VERY close to selling at the bottom but managed to hang on.

Once again, I'm happy with my AA and I'm sticking with it. Probably.

Same here. I stuck to my AA clear through the market crash and that was a great test. After going through all that I'm not going to change my AA now.

Besides, those who do sell in May might lose some of the post-crash ride up. Or not. Let me consult my crystal ball....

 

[clifp]

If you did sell, what would you do with the proceeds?

I can put the money in Vanguard Money Market or Schwab Value Advantage and earn a fabulous .01% lets see on a million dollar that is $100 bucks a year.

Or I can stick in the Schwab High Yield Check or Savings account and get 50x as much .5% that gives me a whole $5,000 to spend a year on a million dollar portfolio. Or I can but 6 month T-bills at .23% or 6 Month CD's at .5% Schwab or Vanguard or 1% at Penfed. Suffice to say with any of the approaches I am not going to be having Trombone Al's problem of not spending enough money...

Of course buying back in November looks very attractive at lower price unless of course the market has moved higher. It which case my options seem to be try and figure out how to live in world where safe investments pay only 1 to 2% or stick the money back in the market that is even more overvalued.

 

[chinaco]

IMO - stick with a disciplined rebalancing plan. You will capture gains on the way up. Don't try to time the market.