Sunday, 7th June 2020

This Month's Magazine
Sell In May and Go Away!!

Sell In May and Go Away!!

The time for investment panic is over; it has been and gone! By Richard Alexander Dip. PFS

As far as stock markets are concerned, you may well have heard this saying, as traditionally, markets can be fairly lackluster during the Summer months but not this year it would seem!!

Since the end of May 2012, apart from a couple of corrections along the way, the Ftse 100 share index has been steadily climbing in value, admittedly on very thin trading but nonetheless, the index has moved from 5272.30 at the end of May to 5860+ by the middle of August – that’s an 11% rise over a 10 week period. So did the Bulls forget to go on holiday this year perhaps?

Now of course it is fair to say that most people will not be invested in the Ftse 100 share index directly but even so, it is not a bad barometer to get a feel for what is going on. Now that we have seen that growth in value, unless you were invested in markets, you have missed that particular boat, but where do things go from here.

Whilst we know that the wrong time to enter a market is when prices are high but judging where markets may go from any point in time is always very difficult. It is no different now, given all of the uncertainties that exist today that we are all too familiar with. However, when markets run, the place to be is in them and not sitting on the sidelines.


For some while now, big institutional fund investors and major corporations have been stockpiling cash and effectively sitting on their hands waiting for the feel good factors to creep back in but as the holiday season starts to draw to a close and the children are going back to school, there is a view that says the Bulls will indeed return to the markets and that we will see some of those cash mountains piling into markets and if that happens, we are likely to see the results in even higher market values still.

All very interesting stuff perhaps, but what should the average investor be thinking right now and what action should be taken. It is always wise to retain a certain amount of cash on deposit where it can be readily accessed in the event of an emergency and how much really depends on each individual but beyond that, a sensible spread of investments should be considered and as far as possible, tax efficiency should also be a consideration.

A mixture of investment types across a range of asset classes is the ideal and thankfully, there are a number of Multi Manager options available to choose from which should ensure the right mix can be accessed and this can be arranged to meet individual risk tolerance as well.

The time for panic is over; it has been and gone! The time for procrastination is also over in my view and a now is the time to take some positive action but do remember to take professional advise from regulated and properly authorized people and when you are considering some options, just one word of caution – if it looks too good to be true, it probably is, so be careful!

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