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Archive for April 21, 2011

“Sell in May” Season Is Upon Us

April 21, 2011 Leave a comment

Ah, April! Spring has sprung, the flowers are blooming on the hillsides of Fisher Investments HQ, stocks have performed nicely despite some global turbulence, earnings are looking fine, and Congress continues to bicker.

This situation is not so uncommon through the years of market history—the particulars just differ. So, now an inevitable question, and one you can count on hearing many times over the next month: Is it time to “Sell in May and go away”?

It’s not the right question. There’s nothing special about the spring and summer. Sometimes the market rallies, others not. Last year, global stocks corrected over the summer, the year before, not. Both ended up fine years to be a stock investor.

Market corrections can come at any time, for virtually limitless reasons, and evaporate as soon as they arrive. Don’t try and get too cute and sidestep perceived turbulence because of some rule that works about as often as it fails. Inevitably, many investors will make this mistake this year, incur trading costs, and possibly have to get back in at higher levels than they sold. For more mistakes investors are likely to make this year, check out my article: Six Mistakes Investors Are Likely to Make This Year.

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