After the sharp sell off the markets experienced at the start of the year, it is no wonder that investors may be more receptive to the old Wall Street adage of 'Sell in May and go away.' What's not to like about taking one's profits and enjoying some time off from the volatility of the markets? Maybe on a nice sunny beach with a cold adult beverage. But I digress. While it sounds appealing, is it an actual strategy, or just another catchy turn of phrase? And if it is a strategy what do you gain from it? Thankfully people with fancy initials after their names and a lot of time on their hands have done studies of the matter.
I was going through my mail when I came across a postcard for a retirement planning event at a local restaurant in Westfield. While I like a good meal as much as the next guy, sitting through the inevitable sales pitch would probably spoil it. I was about to throw it away, when I noticed a long string of initials after one of the presenters' names. It certainly looked impressive and I decided to take a second look.
Selecting a financial advisor is a big decision. You naturally want an advisor who cares as much about your financial welfare as you do. How can you be sure that the advisor you choose will always put your interests first?
Living in New Jersey, the Pharmaceutical Capital of the World, you meet a lot of people that work for either pharmaceutical or biotech companies. Those are fortunate people, because in addition to working in an industry that generally helps improve the human condition, they have also benefited from a very nice multi year run up in their companies' stock prices. That is a pretty good combination.
The quote in the title is attributed to the first American winner of the Nobel prize in economics Paul Samuelson. It highlights both the volatility of the markets and their forecasting ability. This is not to say forecasting is easy, just ask any weatherman, just to point out that the market doesn't always get it right. With the S&P 500 down approximately 11% from it recent high in November, we thought it would be a good time to review the history of these pullbacks and put them in perspective.