Sell in May, Go Away and Don't Come Back Till St Leger Day
This is an old adage that is often quoted within the world of the Stockmarket. It reflects the fact that the market tends to be quieter during the summer months. The ‘St Leger day’ saying advises investors not to have their money invested in the quieter months between May and early September. But does it hold true for every year? Taking the year 2005 as an example, investors who followed this old Stockmarket adage would have missed out on strong double-digit returns. According to Halifax Financial Services, between May and August 2005, the FTSE 100 delivered a total return (share prices and dividends) of 10.6%, the fourth largest increase since 1986, while the wider FTSE All Share index gained by 11.1% in terms of total return. In fact, the cumulative year’s performance was one of the strongest in the past two decades. The St Leger Day adage did not hold true for 2005, or the two years before. This year – 2006, however, is a different story. With St Leger day falling on 9th September it is now past, and we are back into the swing of trading following the summer break. Question is: after the quiet month in August 2006 in the Stockmarket, are we in for the expected rise based on the St Leger Day adage? If history is anything to go by, the figures so far seem to suggest that the Stockmarket should soon recover from its slumber and investors who followed this adage this year are in to make a tidy profit. Since 11th May 2006, share prices all over the world have not been as exciting as the previous year. We’ve not seen such disappointing activity since 2001 and 2002, and most investors have had to depend on tenacity not to rush out and sell every stock. However, as any experienced investor would know, once you have a long-term perspective and do not need your money immediately this can prove an opportunity to expand your holdings, instead of a concern. You get to buy more shares at lower prices. Timing the market may sound tempting, however it has been proved that it is virtually impossible to consistently predict the movement of the market on a day-to-day or month-to-month basis. Your best option is to have an investment strategy and to stick with it. So long as you have chosen a good stock that has held its value over time try to stay invested for the long term and do not attempt to time the market by dipping in and out. The St Leger day saying is simply an interesting popular adage about the future direction of share prices and can not to be trusted as an investment guide. Your investment success depends on a sound strategy, not some traditional adage. Note: St Leger is a horseracing festival that was first run at Doncaster Racecourse and is named after the race's founder, Anthony St Leger, and not Saint Leger, whose feast day is 2nd October. About the Author Wealth and prosperity coach Margaret Ntifo specialises in helping empower people create ideal lives filled with more Money, Wealth and Prosperity. For more information, and a free 7-Day e-course visit: Money, Wealth & Prosperity TIPS. You may freely distribute this article in its entirety providing this copyright notice remains intact. Further information contact: Margaret Ntifo Copyright 2006: All Rights Reserved |
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