From Barron's, Apr. 28:
No one seems to care about the third line of the triplet (aaa) "...come back on St. Leger's Day."With just a few days before the beginning of May, readers of the financial media are being treated to a slew of stories discussing the investment saw "Sell in May and Go Away."These stories never seem to go away and for good reason: U.S. stock market tends to underperform for the next six months on average compared with the colder half of the year."Over the last 40 years, the S&P 500 Index has averaged a gain of 7.56% from November through April and has been positive 80% of the time," writes Rocky White, in a piece for Schaeffer's Investment Research that appeared on the Forbes Website. "From May through October, the average return is just 1.74%, with 67% of them positive."Several articles that I reference in this column each offer their own perspective and ways to approach this seasonal phenomenon.You may have already noticed a piece on this Website by columnist Mark Hulbert.Though Hulbert concedes that markets tend to generate lackluster returns from May through October, he points out an academic study which suggests that consumer-staples and other defensive stocks tend to hold up fairly well during this period.Interestingly, the piece by Schaeffer's Rocky White has its own refinement on the "Sell in May" theme. He writes that he broke down the May-through-October returns further into three-month intervals....MORE
(2nd Saturday in September)
