Weekly Wrap: Sell in May...?

Friday, May 15 2015 by
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Weekly Wrap Sell in May

According to our weathered copy of the Stock Trader's Almanac, May is one of the worst months of the year for the stock market. No surprise then that the old adage “Sell in May and go away, come back on St Leger's Day" still persists in the headlines. More than half the years since 1970 have apparently seen negative returns. And the average performance has been -0.6%. Should you be concerned? Not according to US investor Ken Fisher. He recently wrote recently in Money Observer that selling up in May is 'very wrong and financially bad advice'.

Seasonal anomalies are a huge source of intrigue for academics. Back in 2002Ben Jacobsen and Sven Bouman came up with what's regarded by their peers as the seminal work on the Sell in May strategy. They found that in most countries 'the average returns in the period May-October are not significantly different from zero and are often even negative'.

Alas, a more recent investigation of the strategy tallies with Fisher's belief that it's bunkum. Last year researchers Hubert Dichtl and Wolfgang Drobetz revisited the data and found that this seasonal effect had weakened or even diminished recently. They said it no longer constituted a “free lunch". It turns out that the concept of efficient capital markets has slammed the door on this one.

At Stockopedia this week we had a look at Ten FTSE 350 stocks for dividend growth investors. Alex Naamani covered the The Maiden Dividend Anomaly in his StockRank Movers column, while our small-cap expert Paul Scott was kept busy with his daily reports, which you can read here.

Elsewhere this week, we've been reading:

Safe Investing!

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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1 Comment on this Article show/hide all

UK Value Investor 16th May '15 1 of 1
1

Thanks for the link Ben. In return here's a link to a rather excellent breakdown of UK wages and house prices by county:

http://www.retirementinvestingtoday.com/2015/05/valuing-housing-of-england-and-wales-at.html

Newsletter: UK Value Investor
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About Ben Hobson

Ben Hobson

Strategies Editor at Stockopedia. My goal is to help private investors learn and invest with confidence through the articles, ebooks and other resources we publish on site. I also occasionally bunk off to interview famous investors at expensive restaurants. I studied History at Aberystwyth University, trained as a journalist and covered business news and corporate finance before settling in as one of the first staff members at Stockopedia.  Away from Stockopedia I'm a mountain bike junkie. more »

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