Happy May Day!
May 1 is a forgotten holiday that has been celebrated for centuries. According to history.com, the Celts believed May 1 to be the single most important day of the year.
The unique American tradition of May Basket Day quietly faded from popularity in the mid-1900s. May 1 was considered Labor Day in the United States in remembrance of the Haymarket Riot in Chicago in 1884, but it was moved to September in 1894.
One traditional May saying that survives is the old Stock Trader’s Almanac axiom to “Sell in May and go away.”
Instead of celebrating May Day, this sounds more like a distressful “mayday, mayday, mayday” signal of a panicked pilot attempting to avoid a disaster.
Will you spend your May Day celebrating or panicking? You get to pick.
For those who prefer the “mayday, mayday, mayday” approach, there are clearly some danger signs ahead. It is easy to observe that inflation is not coming down as rapidly as anticipated, interest rates are likely staying higher for long, political unrest is growing, a very competitive and rancorous election season is upon us, and Congress is fairly dysfunctional while conflicts flare around the world.
There is really not much to celebrate in that list, so maybe “mayday, mayday, mayday” is the easiest approach to take.
For those who prefer to celebrate, there are clearly some positive signs. The long-anticipated recession has given way to a resilient economy with abundant jobs, corporate earnings continue to remain strong despite numerous challenges, and consumers are generally in healthy shape as incomes have grown.
More importantly, based on our Portfolio SegmentationTM process, it would probably take more than eight consecutive sullen summers to throw our clients’ investment plans off course. As long as you have the forethought to put time on your side, “sell in May” is not a logical approach to building long-term wealth.
May Day is not mayday, mayday, mayday for the financial markets. Yes, there are likely to be some tough market stretches this summer (and fall, and winter, and spring).
If you start to feel growing panic about the markets’ short-term direction, circle back to your logical long-term plan for a boost in confidence. Maybe even follow the second half of the old axiom by ignoring any market tantrums — and “go away” for some rest and relaxation.
Quote of the week: Ben Bernanke: “Don’t try to time the market. It’s very, very difficult to do. There may be a couple of people in the world who can do it, but if there are they’re not telling you.”
Photo Credit: iStock ID: #1480118054 Credit: Pez Photography
