Sell in May and Go Away? – May News

April 30, 2020 10 Minute Read

The markets are up as I write this and as we close out the last few days of April.  Will it continue?  Have we seen the worst of the worst epidemic in 100 years?  Will the world economies bounce back and salvage what could be a negative global GDP for the year?  We don’t know, but I can’t imagine things will return as they were before.  Airlines, cruise ships, shopping malls, and other close contact activities may never return to how they were.  There are going to have to be some adjustments; we don’t know what they are yet.  In the Wall Street Journal today, an article described the work of a group of scientists and billionaires. This group is reading reams of research, culling information, and collaborating in ways never seen before this outbreak. The intent is to forward the best ideas as to how to combat the virus. For me, this is a promising example of individuals at their best working together for a common cause. 

How do we invest, save, and even prosper in these times?  Is it too early to use the word prosper while so many are out of work and facing financial hardship?  Maybe, but we have to start somewhere.  One of my favorite Einstein quotes goes something like, “Problems cannot be solved with the same mindset that created them.”  We are going to have to shift our mindset if we are going to thrive in the time of Coronavirus.  I leave it to you to think about what mindset we need to change to go forward.  For now, what practical steps can we take to move forward?  In last month’s post, I talked about the shift I had seen in my conversations with clients from “What can I do about my savings and investments?” to “How am I going to get through the next 90 days?”  I offered a few things you can do, and I welcome your feedback.  Last month’s issue is here…

There is a Wall Street aphorism, “Sell in May and go away.”  The adage referred to the custom of the wealthy to leave the city during the hot summer months. Without wealthy traders in town, volume dropped, and prices often declined.  This pattern is not nearly as accurate as it once was. Still, the best months of the market typically are from November to April.  Caution: Be careful here.  Patterns like this exist until they don’t, and you don’t want to make the mistake of betting on them when they are no longer applicable.  I include this more because it is an interesting observation rather than something to trade on.  Since I addressed how to get through the next 90 days, I’ll attempt to suggest how to manage your investment in the coming months.

  • Reevaluate your risk tolerance.  There are boatloads of risk tolerance questionnaires out there, and we use one, and I tell clients they are just a starting point and the way to know yourself and your risk tolerance is to go through a few market cycles
    • Observation:  In my experience, everyone’s risk tolerance is higher during bull markets.  When the market turns bearish, risk tolerances decline.
    • Action item:  Retake our risk tolerance questionnaire and set up a time to discuss it. Zoom is our friend these days, and I am happy to set up a call with you to review your results.  You can contact me here for a questionnaire and to set up a time to talk.
  • Reevaluate your need for cash.  Are you going to need to rely on your investments and savings in the next three months, six months, a year?  If so, you need to let us know so we can move some assets to cash.
  • Do you have large positions in a particular stock or industry?  Now maybe the time to diversify or to hedge these positions.  We are working actively with the strategy team at TD Ameritrade to find ways to provide clients with some downside protection.  We are happy to do the same for you. Contact me to set up a time to discuss…
  • Is the market volatility keeping you up at night? Let’s discuss your strategy and see if we can take less risk in your portfolio.
  • Are you a business owner who is struggling?  Ok, this is one of the more challenging ones, and we have some resources to help navigate the SBA landscape.  We are on calls regularly with our referral partners, and the situation is evolving. Let’s set up some time to talk about your situation…

We are here for you.  I have extended my hours and willing to schedule a phone call, Zoom, Skye, or Google Hangouts.  Please don’t hesitate to call me if I can help.  My cell phone is 949-439-9075, and my hours of availability are 7 am to 7 pm Monday through Friday.

Here are some of the books and resources we have recommended recently. If you have a resource you want to share, please let us know. 

We’ll get it out there in the next issue.

Tapping into Wealth, Margaret Lynch

Discover Your Purpose, Rhys Thomas

Thinking Fast and Slow, Daniel Kahneman

You are a Badass at Making Money, Jen Sincero

I Will Teach You to be Rich, Ramit Sethi

The Science of Getting Rich, Wallace Wattles

Your Money or Your Life, Vicki Robin

What can you expect from us?
I am very interested in how I can make my business more focused on your needs.  I am here and ready to listen to your candid feedback on how I can improve.  Please contact me here with comments, concerns, and feedback.  

I like to post resources here that I hope will inspire, inform, and illuminate. If you come across things you want to share, please reach out to me at david@procoreadvisors.com. Know that we appreciate you and we are here to serve you. We exist to help you achieve a more predictable and comfortable future.


The links provided are for educational purposes only. The links do not represent an endorsement by either Hicok Financial Solutions or ProCore Advisors, LLC.