Sell in May, and go away?

Sell in May and go away?

Hello everyone, and welcome to the May 2021 edition of the boodle blog. We are pleased to have you with us, and we hope that you are safe and sound.
Wall Street has many sayings that we have heard over the decades since we have been investors, and the one that we will appropriately focus on, is the one that fits neatly into this month’s blog. Many in the investment world subscribe to the saying “Sell in May and go away”. When I investigated the meaning behind this saying, I discovered that there were investors who sell their portfolios in May and buy back into the market in October, believing this action generates better returns than someone who simply left their portfolio alone.
What we do at boodle is look at various economic factors, and apply those factors to current market conditions. This analysis helps us decide if we want to sell off our portfolio holdings or stay fully invested. So, let us look at our indicators and see what they are saying in regards to market direction.
The biggest drag on the economy right now is the coronavirus epidemic that has shut down businesses all over the world. What we are seeing today is a strategic rollout of vaccines and millions of Americans being vaccinated. We believe the tide has turned, and as the economy opens, stocks should continue to perform well.
Now, lets look at the unemployment rate (We are writing this before the release). Although many businesses continue to struggle, industries across the country are starting to hire again. We saw an exceedingly high growth for jobs in March, and we expect that type of good news to continue going forward.

Inflation has crept up slightly, and the Federal Reserve has stated that a more elevated inflation rate will be tolerated for the foreseeable future, thus inflation won’t become a major concern.

The Housing Market is posting positive indicators, and we see that in the 19.4% new housing permits. That is the best gain since June of 2006. That 19.4% housing permit number is from March and it represents 1.7 million new housing units.
Finally, we expect to see the S&P 500 grind out more gains, albeit at a slower pace than we saw for the first four months of 2021.
So, with these data points, is boodle recommending that you sell your portfolio this month, and buy back into the market in October? We cannot make that call for you. What we can do is give our opinion and we want to state clearly that it is our opinion that a fully invested portfolio, containing low-cost, no-load funds is the best strategy for any of our members, and future clients that want to work with us in achieving financial knowledge and insight. Stick with your dollar-cost-average strategy, and you should have exceptionally good portfolio results throughout the coming months. Thank you for choosing boodle, and we look forward to serving you and having you as a client.