MarketWatch article: Sell the stock market in May and go away? Not so fast, say experts.
Alright welcome to this week's Eagle update. Let's start with the old axiom sell in May and go away. There's some historical evidence that stock markets in six months starting in May and ending in October, compared to the returns from November to April, on average it's held true but it's kind of spotty, but that their monthly record is better, it certainly hasn't been that way last few years.
We Don't Try to Time the Market
I've never been a big follower of little sayings like this because it's more market-timing than having a plan, also just with investment management in general, if you try to time the market, you know, let's say you actually get it right the first time, now you have to get it right twice, you have to know when to get back in, so that timing part has never been something that is statistically real achievable for anyone.
One Bad Year or Guess, can Wipe out Many Good Years
Also, let's say nine years out of ten, you get it right and then the tenth year comes along and you know there's a 20 percent gain and one way or the other vice versa it depends on which way you're playing it, and it just wipes out the previous nine years, you will need to be right, I mean there's just, it's just not worth it and over time I just don't see how it can really really stand up. So we know most of that and that's why we go through our IPS statements our investment policy statements for each household to make sure everybody's in what they should be according to their own risk tolerance. And as I've mentioned before, if you're having trouble sleeping at night because what the markets are doing, then then we should speak and we should go through it together, really work through the statements. They are there for you and for me you know, to gauge where you can be what you can do.
A Reason to Stay in the Game
I hope you liked the setting today, a little better than my last video certainly better lighting and we're trying a little bit different camera method, I bought a little tripod so getting pretty fancy. And also I just wanted to add one more little interesting fact: Over the last 10 years, the bottom 98% of all trading days produced a total return of zero! The top 2% of trading days, which was just over 50 days total, netted 400%! Obviously 10 years ago was 2009. That's when the market hit the absolute bottom in 2009 in March and then it started coming back up from there but that's why generally we we stay focused on staying in the market and not trying to time. If you guys have any questions or concerns or something that you'd like me to to update or highlight in the future, feel free to reach out and I'd be happy to accommodate! Thank you.