There is something about fishing; it never comes out well for the bait.

Posted on 22 June 2015 by Douglas Chadwick

I am curious as to whether people still believe the old financial maxim of “Sell in May and go away”? Does it still makes any sense in this modern age of computers and the internet, where stock market transactions can be carried out easily from wherever you - at home, on holiday, or in the office. It does however seem that the markets have a tendency to fall at this time of year. Perhaps it is nothing to do with technology, and more of a seasonal financial come political event where problems are left unresolved until the autumn. As a result the markets will always pull back at this time of year whilst they wait for a resolution. I have a particular interest in this question as I would like to stay invested in the UK smaller companies and the UK equity income sectors. British manufacturers are doing well at the moment, probably better than reported in the press. Unemployment continues to improve and now we read that wages are starting to rise ahead of inflation. At the same time the government is promising to spend less, which should eventually mean that they will take less. All of this is good news and, without the Greek problem, surely these two sectors would be racing ahead. But would they, or would the above maxim come into play? A long- term passive approach might just be to accept the spring fall, when, and if it happens, and stay invested waiting for the autumn recovery. I however, hate the thought of taking the potential fall, and so I will sell half and watch and see what happens. Selling the other half, if the fall continues whilst I wait for calm to return to the markets and these two sectors.