Don't Sell In May...Celebrate!Submitted by O'Grady Financial Group on May 3rd, 2019
Happy May! I swear it was New Year’s Day yesterday. National Corona Beer Day…I mean Cinco de Mayo is upon us. National Lost Sock Memorial Day arrives on the 9th. National Clean Up Your Room Day falls on the 10th. Seems like those should be the other way around. The real Memorial Day is breathing down our neck, the unofficial start of summer. So don’t sell in May and go away as the old Wall Street canard suggests.
And here’s why. What a first four months it’s been for the market. The S&P 500 hitting a new all time high, wrapping up its best April since 2009. Up 17.5% for the year through April…the best four month start to a year since 1987.
At some point, expect a pullback, a correction, and then a recession. At some point. I never pretend to know when that’ll be. Because nobody really knows.
But here’s a few fun facts to ease our egos that always clamor for certainty…of which we know there is none. But still fun nonetheless.
If we look back to 1950, the average 12-month gain for the S&P 500 after hitting new highs…is 9.8%.
Remember the end of last year, when the world was ending…at least for mainstream financial media. August saw record highs…but December was grim and the New Year was looking grimmer. How about this…when new S&P 500 highs are hit at least 6-months apart, like this time, the historical returns over the next 12-months have been about 12%.
And if you’re thinking new records make it harder to go higher, consider this: The average 5-year annualized gain in the S&P 500 after hitting all-time highs is 9%.
But all that was historical and is no guarantee of the future. But we don’t need that. We’re investors, not traders or speculators. We don’t do market timing or economic forecasting. We believe in capitalism and the free market system. And if your goals haven’t changed…neither does the plan or the portfolio.
Don’t forget the limes for the Corona.