Yesterday was the first trading day in May for the US stock market. Wall Street investors are urged to stop using the ancient myth of Sell in May and Go Away (SMGA).
Quoting from CNN, Tuesday (4/5/2021) Paul Zemsky, Head of Strategic Investment and Multi-asset Solutions at Voya Investment Management, reminded that in early 2021 there are still many companies that will announce revenue, make acquisitions, and go public.
The Federal Reserve also continues to meet the government to issue data on the job market, retail sales, inflation and many other things. Thus, investors should pay attention to the headlines related to the stock market, not thinking about what month it is.
“There is no evidence of any kind that Sell in May and Go Away will add value. We like stocks and will not change that opinion just because the calendar says May. The fundamentals remain strong and that’s what we see. The economy is on a good footing. “said Zemsky.
Company Has Good Prospects
Strategists at UBS Global Wealth Management reveal that the company’s earnings for Q1-2021 have been solid as a whole, and the company’s prospects for the rest of the year are also healthy. He appealed to investors to keep investing in shares this May.
“We recommend that investors keep investing, diversify their exposure, and stay in control of their wealth plans,” he said.
It should also be noted that selling shares in May is a good way to make investors lose profits. In a flashback, in May-October last year, the S&P 500 jumped 12%.
According to data compiled by LPL Financial, the S&P 500 has seen an average of 3.8% increase between May and October over the past 10 years. The only time the market fell was in 2011, a decline of 8.1% and in 2015, when the index fell only 0.3%.
Given this evidence, Ryan Detrick’s Head of Market Strategy at LPL Financial discouraged investors from pursuing a “sell in May” strategy.