Of course, if you are an investor with some experience in the financial markets, you will have heard a phrase like this on more than one occasion: sell in May and go away ii sai. In other words, “sell in May and leave”, which is its literal translation and reflects a market sentiment that is met with great fidelity on many occasions. On the other hand, it is the perfect excuse for you to be out of the bag during the summer and come back sometime in the fall. But it will be necessary to analyze whether it is convenient or not the fact that you apply this strategy in so special investment.
In any case, there is a question that you must ask yourself now and that is the following. What do you get from applying this unique strategy? Well, fundamentally a very important one that resides in the fact that above all you will avoid being invested in a period of time in which the shares have had lowest yields historically. It has not always been like that, but if you let yourself be carried away by the statistics of the last decades you will see that you are in the most correct decision of all.
On the other hand, there is another opinion in financial markets in which prevails that the seasonality not be a factor that moves the stock market. If not, on the contrary, it depends on another series of financial parameters, including the trend of a stock, index or stock sector. This, as in everything that is generated in equities, depends on the user's own tastes.
For what reasons do you have to sell?
Anyway, there is a little trick in the wording of this article so relevant for all kinds of investors and it is the approach to the topic of discussion itself. Because it really caters to the denomination of “sell in May and leave, and don't come back until mid-September to resume investments. This is a popular saying that is certainly not from now, but has been going on for many years. implanting in the financial markets. Perhaps from the time of your grandparents or even later.
It should not be forgotten in any way that this characteristic strategy is due to the fact that the returns in this period have been historically lowest than in the rest. Reason more than enough to stay away from the equity markets as of now. So you will have no choice but to think about it a little more than other times because it is after all your money that you are gambling. And on this aspect there is no sentimentality that is worth since you want it above other considerations is to make the savings profitable. Nothing more and nothing less.
Bearish period par excellence
In no case should you underestimate that this period that has just started is one of the most bearish of the year. And with rare exceptions that have occurred as a result of the synergies of the financial markets themselves. From this scenario, the most prudent measure you can take in your next decision is to absent yourself from any financial operation in the stock market sector. Even though the play goes wrong for you. That is, the equities are bullish in these months. Because the point now is that you have more to lose than gain. And total for a couple of months that will pass very quickly.
On the other hand, these months that take place from May they are very dangerous because they are very sensitive to unforeseen news or events. As it has happened during the last years, as on the other hand you will know from very good sources. So it doesn't hurt that you take a period of reflection before going on vacation. Or at least with a portfolio in investment much lighter than the one you have had until now.
This is a period in the year when buying trends in equities relax substantially. Even at very noticeable levels in some years and allows sales to be imposed with great clarity. For after the holiday period to arrive even stronger to take advantage of some more competitive prices than before. That is to say, buying the shares with less economic effort than at the end of the day when it comes to investing in the stock market. Although it is true that this peculiar scenario is not fulfilled in every year.
What can you do now?
This is the million dollar question that many small and medium investors come to. Well, it is not an easy solution to elucidate, far from it. But you have in your hand some options that you can turn to in these precise moments. Do you want to know some of these strategies to make the savings profitable during these summer months? Well, pay a little attention now because you may get out of more than one predicament in the current circumstances.
Raw Materials: It is undoubtedly the investment with the greatest growth potential at the moment. As for example in the specific case of oil. Not surprisingly, it is developing a bullish rally that may even lead its prices to caress the important level of $ 100 a barrel from 80 euros. This in practice means that it still has 20% travel. And that can become the solution to your investment problems during this complicated summer that you have ahead.
Seize the strength of the bund
If there is a powerful economy within the European Union, it is undoubtedly the German one. And in this sense, your strategy can be based on opening positions in the German bund. Of course, its profitability will not be very spectacular, but it will meet your investment expectations for the next few months. Against what is the peripheral debt which is represented in countries such as Spain, Portugal, Italy and even Greece itself. Not surprisingly, a good part of the monetary flows around the world take refuge in this important international financial asset.
Not only can you open positions in the German bund directly. If not, on the contrary, the simplest way is materialized through the Investment funds that take into account this alternative to make the savings profitable. If you wish, you can combine it with other financial assets, both from equities and fixed income. So that in this way, you are in the best of conditions to diversify your investments from now on. Likewise, you will eliminate unnecessary risks that can give you more than one dislike in the open positions until now.
Wait for better prices to arrive
On the other hand, you can also give yourself an opportunity cost: if the shares appreciated during the period in which the investor was out of the market, someone who implemented this very special strategy those benefits would have been lost. During the current global bull market, your application has worked very emphatically on most occasions. Why not do it yourself this time? Of course, there is a lot you can earn from these approaches that we propose from this article.
However, exit and enter markets Due to a calendar change it entails many costs. There are the monetary costs, from commissions associated with the purchase and sale of shares to the tax repercussions of the same. So everything will depend on the personal situation in which each investor finds himself, as it is in your own case. This is a factor that investors who allocate their operations to the medium and especially long term will not go through. With significant savings in commissions and all expenses in its management and maintenance.
What to do in these situations?
Either way, if you are an investor who is heading for the longer term and needs to increase your personal capital, you should know that missing these increases in the summer months can harm your portfolio. For this reason, it is a very difficult decision to make, although prevail to be in liquidity above other technical considerations and maybe even from a fundamental point of view. This is so because first of all you must seek security in the movements that you plan from now on. Above the profitability that you can obtain in this class of operations in the equity markets.
In this sense, the best decision should be based on an analysis of your most relevant needs. And based on this variable, check what is the trend status of stock indices. Since it will not be the same to face one clearly bullish to others with bearish connotations. To the point that your investment strategies must be clearly different. At least with regard to the shorter periods in their tenure.