Sell in May and stay away probably a saying you have all heard. The Americans always come up With this Expression as we enter May. Can we relate this to the 2019 Stock market and how can we explain this reoccurence.
This the Nasdaq chart 2019. We can all see the big market Bounce from my February blog. What is also apparent is the slump in May. It seems like we have a situation this year where the sell in May Expression valid. Why does this often happen, the May selldown?
I have tried earlier to explain my take on earnings Seasons. A rally that often ends in a little correction. 2/3 of earnings beat expectations and hence we get an earnings season bull. For me it is Clear, as soon as the big caps had come With earnings we got a profit taking situation With a selldown.
Some of you would say, what about Trump and his newly stated hikes in tariffs With China? Is this not the reason for the little correction? Of course News like this affect markets, but this just in addition to the earnings season profit taking.
If you have been in this May selldown situation earlier, in the 10 year long bull, you would know these selldowns to be buying opportunities. Especially now With a 3.2% US GDP Growth.
In February I came With a when to buy markets statement. You should buy in before the Train leaves the station. In the big Bounce of 2019 you would have cashed in big time With this strategy.
If you are one of my regular Readers you probably picked up my “The earnings season perspective to Stocks”. This hypothesis says there are 4 probable earnings season rallies in a year, as there are 4 earnings Seasons.
When to sell Your long term Investments I wrote about in “When the trend breaks”. All of you have made great profits in investing in the last 10 years upward trend.
This to help you in this May selldown situation.