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No Protesting A Mostly Peaceful Summer Rally

Aren’t you glad you didn’t sell in May and go away.  You know that old Wall Street adage that proposes you sell your stocks in May and come back in the fall when things get interesting again.

The thinking goes that fewer folks are interested in investing during the summer, leading to lower activity, lower trading volume, and an overall lack of interest in investments.  So you may as well just sell your holdings and disappear for the summer because you’ll underperform anyway.

Or so the theory goes. Although the theory may contain some historical truth, it’s not working in the summer of Corona 2020.

And it certainly doesn’t jibe with one of our biggest investing mantras:  No market timing, no economic forecasting.  

Here’s what the May sellers missed.

The best August since 1986…the S&P 500…up 7%.

The Dow tacks on almost 8% in August.

And the NASDAQ nearly a 10% gain for the month.

From the highs of February to the lows of March and new all time highs of August, here’s where the three major indexes stand so far this year.

The Dow is a touch underwater.

The 500 a touch past 8% year to date.

And the NASDAQ an impressive 31% gain on the year.

Nice to know numbers.   Remember that’s just a snapshot in time.  And no arbitrary short-term calendar period determines what happens in your life long investing career.  

That’s mostly determined by your behavior and reaction to the crisis du jour.  And there will always be a crisis du jour.

And never forget that financial media peddles in short-term advice.  You’re a long-term investor and son’t succumb to short-term advice.

Now go have a great Labor Day Weekend.