By now, you're probably sick of hearing that stock phrase "Sell in May and go away." (Going away until after the expected Halloween correction.)
Too bad. (Grinning) I'm going to talk about it some more. Regular readers are probably expecting me to scoff at this hocus pocus nonsense. Well, I'm not. If the stock market was based on rational calculations and pure math, sure, this phrase doesn't make much sense. Why would stocks suffer during the summer? Why does everyone dump their stocks for fire sale prices in October? There's no reason to.
But the stock market isn't rational and it isn't reasonable (thank goodness because that's how investors find deals). It consists of a collection of rather irrational human beings and these human beings, if they expect a Halloween massacre, will create the conditions for a Halloween massacre. Darn it. Analysts be darned. Their expectations will drive actual results.
I don't personally sell in May and go away. If my stocks are good value (according to my calcs), I keep them. If they are overpriced, I sell them. If they are underpriced, I buy more. Regardless of whether it is May or January or October. I look to the long term (5-10 years). I'm wary of commissions and taxes on sales.
But that is just me. I'm not going to laugh at anyone for following the "Sell in May and go away" strategy.