Consider the record, which is pretty stunning. If you'd put $10,000 into the S&P 500 with a strict sell-in-May, buy-in-October strategy on May 1, 1950, you'd have ended 2006 with more than $600,000, according to calculations from Ned Davis Research. If you'd done the opposite, and invested every May 1 and sold every Sept. 1, you'd have $12,083. (If you'd just let it ride in a buy-and-hold strategy, you'd have $129,515, according to S&P.) http://www.msnbc.msn.com/id/18355506/site/newsweek/
This bit sounds more like it to me: The timing is difficult to predict. Sell-in-May evangelist Jeffrey Hirsch, publisher of the Stock Trader's Almanac, says the stock-slowdown pattern might be shifting. From 1985 to 1997, May was actually the strongest month for the S&P 500, and in recent years the opening days of May have been good times to be in the market. Hirsch says he still believes in the summer stock doldrums, but sees them happening later than they used to. "Sell in June, not too soon"?
Great article. Thanks for posting. I may start a 'short in May, go long in September strategy', with speculative money, just to see what happens.
wow, those figures are incredible. I am really amazed to see such a drastic difference between the two. Right now futures are showing a negative opening, I dont think there is any need to worry. Im sure by the A.M. they will be trading slightly higher. They are going to close the last day of April higher...
So, you're going to put money on a play that appears to have a negative expectancy? That just doesn't make sense.
This is utterly simplistic, what about taxes, and what is the comparable to monthly dollar cost averaging? Is this a trading or an investing strategy?
Agreed. Ultrashort is the way to go. I am not about to short the market now. I am waiting until we see true technical damage, and the beginning of what I think will be a retracement.