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April 5, 2013, 2:50 p.m. EDT
Why it pays to sell in May
Commentary: Be ready to sell at the first sign of market weakness
…SO WHY SHORT A STOCK…???
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Investors should strongly consider cutting their stock exposure this coming May Day and parking the proceeds in cash until Halloween.
That advice comes courtesy of a famous piece of Wall Street folklore that is known by the adage “sell in May and go away.”
Unlike most of the other stories investors tell, however, the historical evidence in favor of this one is surprisingly strong. And deeper drilling into the data suggests there are ways to tweak the approach so that you don’t have to dump stocks entirely to capture some of the benefit.
You might also know of the “sell in May” pattern by its other name, the “Halloween indicator.” Both refer to the pronounced tendency for the stock market, on average, to turn in its best returns between Halloween and May Day — referred to loosely as the “winter” months.
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The historical evidence in favor selling in May is very strong.
The stock market’s average return during the other half of the year, the “summer” months, is far lower.
This pattern has been very much in evidence in recent years. Since the seasonally favorable period began last Halloween, for example, the Dow Jones Industrial Average DJIA -0.28% has gained 11.5%. During last year’s unfavorable six-month period, by contrast, the Dow lost 0.9%. The year before that saw a 10.5% gain during the winter months and a 6.7% loss during the summer months.
To be sure, the pattern hasn’t always worked out this well. But it has far more often than not: Over the past 50 years, the Dow on average has produced a gain of 7.5% during the winter months and lost 0.1% during the summer months.
…so can somebody tell me what “short selling” and “short buying” is for…???
What really happens is, that the Stocks when going down, they go down fast, so that a lot or orders cannot be filled…!
And the small investor generally looses, trying to get into the gain of the down…!
MY BROTHER ONCE TOLD ME WHEN I ASKED, IF HE UNDERSTOOD “SHORT BUYING AND SELLING”?:
He said he didn’t! And I tried to explain and explain to him…! You see his logic was, who pays, when the MATHS are negative? THE MARKET MAKERS, THE GOVERNMENT, and the “imaginary money” of stocks that are in loss as to their first buying price…! BLA, BLA, etc, etc…!
Believe me, big Bank failures, where done and are done with big huge “short selling and buying”…! AND THE MONEY “AIN’T” THERE…!!!
Only white collar thief’s make money on Stocks! Or of you are lucky and bought a Stock years ago, that is still on a all time high…!
BUT REMEMBER, GENERALLY, HALF OF THE STOCK EXCHANGES ARE UP AND HALF ARE DOWN, for the Market Makers to be able to manage the imbalances…!
REALLY IT IS ALL A ADVANTAGE GAME OF THE INSIDERS AND WHITE COLLAR THIEF’S…!
MORE HAVE TO LOOSE TO BE ABLE TO PAY THE WINNERS…!