October 15, 2014

Update To Sell In May and Go Away

In April of this year, I blogged about the old Wall Street axiom, sell in May and go away.  There is a theory that if you sell in May and buy back in October that your investment returns will be better than just buying and holding.

Of course, you will miss out on a few dividend payments which as I've said before and hundreds of experts agree is at least half of the market returns over time but aside that, selling in May does seem to have some merit occasionally. 

There are exceptions to the rule and unfortunately, far too many to ignore so the answer if you should sell your stocks in May and buy back in October is not easy.  It is up to you.

In this year 2014, the market had run up for five years so taking some money off the table may not have been a bad idea BUT the problem with that is that you have to buy back in someday and invariably individual investors are not good market timers (neither are Wall St pros).

Sorry not to have a crystal ball.

October 10, 2014

CNBC Traders Results

I've been interested to see the results of the traders who have been 'paper' trading with $100,000.  To no ones surprise, certainly not mine, some have beaten the market slightly and most have trailed.

These are celebrated people on TV who manage peoples money for a living (besides being on TV).

You can see current results here at CNBC.  Feel free to compare these to the results of the S&P 500 or the DJIA.

I don't mean to rag on anyone in particular but as I have said on this blog and hundreds of times on radio or in articles - IT IS VERY HARD TO BEAT THE MARKET with any regularity at all.  The 'traders' on CNBC can't do it, most mutual fund managers can't do it and certainly, your local financial advisor can't either.

Bottom line is that like most people involved in the investment business, they are in the business of making money - for themselves.  This is achieved by separating you from your money via commissions and fees.

Check out my blog post from 2011 where I compared money management and gambling.