There used to be an old saying, “Sell in May and go away. It was reflective of a much more gentle time in the markets when long lunches were the norm and a man’s word was “his bond. You could afford to take the long view.
Today’s financial world is a lifetime away from those lazy hazy days of selling stocks for the spring and summer. Then, it was quite acceptable to say you were taking a proper vacation. Now, if you are not immediately contactable via blackberry or mobile phone you are considered deficient – a slacker; lazy; someone suspicious; definitely not a team player.
No matter how much we may fight this, it’s easy to understand why we feel the need to be in such constant contact. Markets trade 24 hours, and what happens in Tokyo affects the London open which can set a tone for when New York kicks in.
Why do I write about this now? Because this week is the Memorial Day holiday in the United States, the unofficial start of the summer season. And in Europe too, we are going to move into a different mindset as people prepare for long weekends and glorious weeks away.
Hang on – can you afford to be away ignoring the markets with such abandon? The Dow Jones is still up nearly 30 percent since its March 9th lows, and if recent movements have taught us anything it’s that profits can evaporate quickly in exceptionally volatile markets.
So whether the gains we have seen are going to hold in the days of May is anyone’s guess. Last week, on Quest Means Business, Robert Parker vice chairman of Credit Suisse Asset Management told me he thought May and June would see profit taking and fallbacks in the major markets and the next run-up wouldn’t start until the third quarter.
It is not hard to see why there is pessimism about the immediate future which could suggest, even in these hectic times, there is some sense in the good old fashioned ways. “Sell in May and Go Away might still be the way to go, especially for those of you hoping for a peaceful summer season where you can concentrate more on your tan than your trades.
Remember – nothing in this article is giving advice. Nothing!
Richard Quest is a CNN anchor and correspondent who reports on business travel issues. Tune in to CNN International each weekday at 9 pm to catch Richard’s show, “Quest Means Business.