Sell in May and Walk Away
Monday, April 13, 2009 20:41Posted in category Dow Jones Industrial Average, Stock Market
“Sell in may and walk away” is an old saying on Wall St. The stock market tends to experience periods of relative under and out performance based on seasonality. From 1897-2008, for example, the average return of the DJIA is 4.6% between November to April, while only averaging 2.5% (Almost half) between the months of May to October.
The chart below illustrates the seasonal selling which usually begins in May. Since 2001, the market has sold off 7 out of 8 times.
This bear market rally is getting long in the tooth with May just around the corner.
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Willy2 says:
April 14th, 2009 at 10:28 am
Marc Faber recently has said the S&P 500 could – I repeat – could continue to go up to approx. 1000 because the US government is throwing out so much money.
But on the other hand earnings for the S&P currently are at $ 14, with a S&P 500 at approx. 850 the P/E ratio is approx. 60 and therefore extremely overvalued.
armanini massimo says:
May 10th, 2009 at 8:34 am
The first q was better than the terrible estimates. I must say that analysts seem to be very predictable: forecast profit up in the boom and profit down in the middle of a crash. Overdo both side and you can get a job!! I can see the sp500 at 1000 before year end. easy