Sell in May and go away
Chad Holden from Toronto, Ontario Asks:
Ryan, what is your opinion of the age-old adage “Sell in May and go away.”?
Chad,
We don’t like to base trading decisions on irregular events of the past and prefer to focus on the future. The idea here is to sell in May and come back to the market in September after the summer. Last year markets were flat during the summer months (May-August) as global interest rate fears sent global markets falling, but then all losses were regained by the time September rolled around. An example of this rule backfiring is in 2005 where the TSX advanced 14% during the summer months. We’re not saying there won’t be periods of weakness over the next 4 months, anything is possible, but we don’t think it is enough of a reason to sell off your portfolio.
If you would like your investment question answered, please contact me at ryan_webster@scotiamcleod.com or call me at 519-660-3200.