Thursday, April 16, 2015

Do we Sell in May – or do we stay?

All I know about seasonality is that in an uptrend – you buy-low, sell-high and then buy back even higher. In a downtrend, - you sell-high, buy-low and then sell even lower.

Now we are approaching this annual Sell-in-May thing where your advisor is supposed to call you and recommend selling out your equity portfolio “because it is May”. Quite a silly strategy and unlikely to happen today, because most of the advisors I know are very bright and highly educated. That TV ad run by Interactive Brokers depicting a “broker” to be a sleepy fungus does not represent the advisors I know.  .

Sorry – I lost my focus – anyway I am sure your advisor would suggest the current leadership from the US banking sector is very bullish. According to ALPS Portfolio Solutions Distributor, Inc the Sector SPDR Financial ETF (XLF) is a wide array of diversified financial service firms are featured in this sector with business lines ranging from investment management to commercial and investment banking.

The top six holdings of the Sector SPDR Financial ETF (XLF) are Berkshire Hathaway B (BRK.b), Wells Fargo & Co (WFC). JP Morgan Chase & Co (JPM), Bank of America Corp (BAC), Citigroup Inc (C) and Goldman Sachs Group Inc (GS)

Our chart displays two US financial bellwethers - Goldman Sachs and JP Morgan both just posting new 52-week highs. I think we stay in May. 

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