Tuesday, May 10, 2016

John Mauldin*: 
Sell In May, Go Away?
"To summarize, the data suggests to me that the upside just isn’t there for being in the market from May through September. Again, the market could rip 20% to the upside, and you’d come back and tell me I was an idiot. However, given the high valuations and the historical lack of performance in the May through October period, I think that going neutral makes a lot of sense now. How do you do that? Well, it’s a little tricky. If you have an advisor (and 97% of you should), go to him or her and ask about the wisdom of going neutral. I get that there are special situations (like those I mentioned above) and that you also have tax considerations. Selling a stock with a 100% gain just to give Uncle Sam a chunk is painful. But there are ways to neutralize the downside in your portfolio. This of course means that you have foregone any upside, but we all have to make a decision. Your decision today is what you should do with your portfolio over the next few days. In fact, that is what your decision should be every day. You should look at your portfolio and say, do I want to own that stock today? Would I buy it at today’s price? Honestly, if you don’t reevaluate your portfolio regularly, then you should get somebody to do it for you. Pay a reasonable fee and go back to doing what you really want to be doing. Bottom line: somebody should always be paying attention to your investment portfolio. You worked too hard to accumulate that portfolio to ignore it."
LINK HERE to the PDF

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