In everyday living, we expect certain seasonal patterns to unfold every year. In the fourth quarter of the year, we expect Halloween to give way to Thanksgiving and then Christmas. Each holiday has its own customs and decorations, and each is unique. But each follows a well-defined pattern. It's human nature to expect this level of predictability to be seen in the stock market simply because we like to see some sense of order in the chaos of the market action. The result of this is popular strategies like "sell in May and go away."
Testing has shown that you can achieve almost all of the market gains and avoid the periods of greatest risk by selling at the beginning of May and staying out of the market for the next six months. That means the time to buy is the beginning of November. This is just one of the… Read More …