Sell in May and go away !

[kcowan]

It was the margin calls on gold that started the plunge as investors had to sell other stuff to cover. MF Global moved from 6% to 10% margin last week.

 

[bbbamI]

I was a few hairs off my AA, so I took a little off the table on May 4th. Had nothin' to do with May...just a little rebalancing.

 

[clifp]

I was a few hairs off my AA, so I took a little off the table on May 4th. Had nothin' to do with May...just a little rebalancing.

You Southern woman are trouble, and market movers. Could ya'll give us a bit of warning next time.

 

[bbbamI]

You Southern woman are trouble, and market movers. Could ya'll give us a bit of warning next time.

Seems like whenever I get to sighin' and sayin', 'well...well...well' that's when I make my move.

Stay tuned.....

 

[Meadbh]

Y'all could have waited for me.......

 

[swampwiz]

I was just about 1.6X in my net portfolio, and have just backed down to 1.3X. I have been pretty much a steady 1.3X for a year until the lows in March due to the earthquake in Japan, when I boosted up an extra .3X net, with .6X in Japan. I booked about about a net 8% gain relative to what I would have had, had I not got into Japan (and I missed the very worst day then too! .) Maybe there will be some more bad news there so the market can drop and I can get back in again. Obviously I live my Buffett's maxim, "be fearful when others are greedy and greedy when others are fearful."

I think the market could have a little more to run, and will probably drop down to 1.15X when I think it's at the top. Either way, I will wait for the correction, and load up again. Except for the this last big swoon when I loaded up too soon (which didn't really matter in the long run as I did an inevitable Chapter 7 bankruptcy after that), I have a pretty good record with loading up at the bottom. In 2002, I was so sure that I hocked my new (no loan) car for $16K and plunged into 2X QQQ *exactly* on the lowest day and within 7 months I had doubled my money.

BTW, I use Rydex leveraged funds to get my > 1X weighting.

 

[swampwiz]

I sold my Small Cap index fund yesterday. It has a had a nice run up and I typically like to buy it during a downturn then sell it when the large cap's start to move higher. Today's trading is a good example where the NASDAQ is moving down and S&P up. On the next pullback I will re-allocate those funds to the Total Market fund.

My decision had nothing to do with the time of year.

I think Small Caps are overpriced now, relative to Large Caps. I think that eventually the market will see this and reverse this. It's only the big corporations that can truly leverage the global labor pool arbitrage to the fullest (as well as sell to that labor pool), and since that is where the growth is in the world, the Large Caps are going to be able to deliver earnings growth. I just don't see Small Caps delivering earnings growth worthy of their lofty P/E ratios. Perhaps after a 15% or so relative correction, it might be good to get back into Small Caps.

 

[Free To Canoe]

It's important that investment strategies rhyme.

Can't think of any rhymes?
Bide your time.

 

[kcowan]

Lament by Don Weill
excerpted from 'The Reluctant Investor and Other Light Verse'
I hesitate to make a list
Of all the countless deals I've missed;
Bonanzas that were in my grip -
I watched them through my fingers slip;
The windfalls which I Should have bought
were lost because I over-thought;
I thought of this, I thought of that,
I could have sworn I smelled a rat,
And while I thought things over twice,
Another grabbed them at the price,
It seemed I always hesitate,
Then make my mind up much too late,
A very cautious man am I

 

[urn2bfree]

Not so much timing but wondering about strategies of dollar cost averaging that might be advantageous....
I keep my AA steady (60/40) but new money is always coming in--I am in the accumulation phase-
We recently had some windfalls but I am loathe to put it all in at once just because it fell in our laps right now...we usually just keep about 6 months expenses or so in cash, but I have been thinking about putting these windfalls plus our usual new money in at a steady pace over the next 12 months..I was thinking monthly BUT not evenly--so bet -I mean invest- 1/12 a month over the next year as a baseline but vary the bet- um investment --based on the prior month outcome-- 2 units after a bad month, and back to one unit after a good month... sort of like varying the bet in a progressive betting system -which do work in the long run except tables have upper limit bets to stop that---and if you have several bad in a row it is hard to keep doubling without unlimited funds....
help me out- is this crazy? or just misguided and ultimately fruitless.

 

[Rustic23]

Looks like 'Sell in May' might not have been such a bad idea. DOW down 2% June 1.

 

[IBWino]

Buying opportunity!

 

[frayne]

Actually I think it is just little profit taking.

 

[oma]

Anyone planning to use this strategy in 2011 ?

Just curious.

yep-
moved all of my TSP (Thrift Savings Plan -gov't 401k) from common stock and small cap funds to gov't (G-Fund) until next major correction.

 

[veremchuka]

Buying opportunity!

Too soon. I think there's more pain to come. If the S&P 500 goes to 1290 I'm going to rebalance some fixed income into the S&P 500 in my 401k, I have some funds I left there. If it drops to 1250 I will do it again. I can adjust the AA but I'm not going nuts and getting back to a 65/35 AA, presently it is 35/65 and I sleep much better for that. 40/60 maybe 50/50 for a while is ok then back to 35/65. I've learned market timing is just not worth it.

Free advice and it's worth exactly what you paid for it!