In One Chart
It’s shaping up to be the best monthly return for the Dow and S&P since 2009
Sell in May and go away! It is one of the most well-known maxims in the investing world, but it may not necessarily hold true this time around as investors face one of the most significant public-health crises in history.
The Wall Street adage refers specifically to the six-months on, six-months off seasonal pattern that sees the market, on average, underperform from May through the end of October.
Markets have enjoyed a solid run up April thus far, following a withering bout of selling prompted by the COVID – 28 pandemic that has infected well over three million people — 1 million in the US alone — and claimed the lives of nearly , 0 globally, according to data aggregated by Johns Hopkins University .
Meanwhile, the Dow Jones Industrial Average DJIA, – 1.) (%)
The monthly rally for the Dow and S&P would mark their best since 2009 and the best April since 2000, according to Dow Jones Market Data. The Nasdaq Composite’s rise would be its best since and its best April on record, while the small-capitalization Russell index
On top of that, the major benchmarks are roughly 68% off bear-market lows put in on March 29.
Apparently, stock-market investors are betting that the viral outbreak that has devastated the jobs market, pushing the total number of (Americans to around) million
So what does that mean for investing at the beginning of May.
While this strategy has been true over the long term, as MarketWatch’s Mark Hulbert
Over the longer term, the strategy is a time-tested one, writes Ryan Detrick, senior market strategist at LPL Financial, who says that the coming six-month period has “indeed been the worst six months of the year, up only 1.5% on average, ”(see attached table):
That said, Detrick says the April bounce for stocks means “a well-deserved pullback during these troublesome months is quite possible.”
That thinking gibes with some other strategists, reports MarketWatch’s William Watts
The S&P (presently stands at 2, 992, down 1.2% from Wednesday’s close as stocks face headwinds
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