I just finished reading "The Little Book of Stock Market Cycles", and also recently read "Investing in the Second Lost Decade". Both books talk about secular and cyclical stock market cycles. I was particularly interested in "the best six months" strategy. In short, it states that the best six months of the market (historically) are November through April. And it suggests investing in equity indexes in these months and moving to bonds and/or cash the other 6 months. ETF's would make this very simple.
I know this is (dreaded) market timing, but the historical results are impressive. I looked at my own portfolio, by month, for the last 5 years (I'm pretty much of a buy and hold guy) and it showed much better returns in the best six months versus the worst six months, except for one year, but that year was close.
This would seem to be an awful easy strategy. I know I've read the "sell in May and go away" theory, but I never knew it was this lopsided. So...does anyone use a strategy like this? I'm just looking for input. Thanks.
I know this is (dreaded) market timing, but the historical results are impressive. I looked at my own portfolio, by month, for the last 5 years (I'm pretty much of a buy and hold guy) and it showed much better returns in the best six months versus the worst six months, except for one year, but that year was close.
This would seem to be an awful easy strategy. I know I've read the "sell in May and go away" theory, but I never knew it was this lopsided. So...does anyone use a strategy like this? I'm just looking for input. Thanks.