Financial adviser avoids ‘May sell’ but still insists on sell

Financial Advisors


Despite a long history of data showing the plausibility of selling the stock market in May and into November, financial advisers have not taken a bite.

“It’s day trading at best, speculation at worst,” said Garrett Sorensen, a financial adviser at Markham Wealth.

“Investors should have a strategy that allows them to continue investing even when markets may be disrupted,” he said.

Leaving aside possible headwinds such as the nasty debt ceiling debate in Washington and the risk of inflation turning into stagflation, some advisers continue to preach from the buy and hold bible.

“History shows that markets grow over the long term. It should be in a lower asset class,” said Joey Roth, founder of Flow Financial.

Paul Schatz, president of Heritage Financial, explains that the stock market cliché about selling in May is “basically nonsense.”

“It’s one of those old-fashioned maxims that doesn’t work in real time today,” says Schatz. “From May to October he is not a bearish period for six months. The market is still rising, but to a much lower extent than it was from November to April.”

It may sound silly to bet on a particular calendar cycle, but you can’t deny the track record.

Going back to 1950, the worst six-month period for the S&P 500 index was from May to October, with an average return of 1.7%.

The average return for the six months from April to November is 6.9%.

The origins of May’s sales and withdrawals can be traced back to days of a summer slowdown associated with vacations and vacations. But LPL chief his technical his strategist Adam Turnquist says the modern pattern could all be part of a self-fulfilling prophecy.

“It comes down to math and marketing, and Wall Street is good at both,” he said.

As well as the raw average market performance over the six months, Turnquist says market volatility has historically been higher during the summer months, with September having the highest volatility on average.

Average returns by month going back to 1950 showed an average loss of 70 basis points in September, followed by flat in June and August.

The average return for May over the period is 20 basis points. The average increase in October is 1%, and in July he is 1.3%.

Miramar Capital founder and senior portfolio manager Max Wasserman is avoiding a May sale strategy to time the market. But that doesn’t mean he doesn’t understand the logic of making a profit at the right time.

“It’s not like the whole market is overheating, but if we were profit takers, we would look at riskier categories like technology,” he said, referring to the technology-heavy Nasdaq. He noted that the overall is up 15% this year. index.

Scott Bishop, executive director of wealth solutions at Avidian Wealth Solutions, is also looking beyond the “rules of thumb” for strategic portfolio alignment for specific clients.

“I think now is a good time to reallocate and shift a bit to bonds and thoughtful alternatives, especially for those who are nearing retirement or feeling stressed about their financial planning near retirement,” said Bishop. Stated. “With the market choppy, the Fed policy uncertain, the banking crisis and the many global geopolitical risks we are facing, the market is perfectly priced in my opinion, so going forward will be a volatile market cycle.”

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