Australian Investment Blog

Tax loss selling is close at hand People can use statistics to make any argument and one we have recently been hearing quoted often is "sell in May and go away". If we simply look at an average fall of over 6% between May and June for the last 6 years, why would you own equities today? If we combine this statistic with looming geopolitical risks and rich valuations, a move to cash becomes an easy one for any nervous investor. However, while there is no doubt that the best seasonal period for equities is November to April, holding no equities from May makes zero sense to us. Since 1929, the S&P500 has gained 5% from November to April and 1.87% from May - October. Importantly, that's still a reasonable average gain for the approaching months. We remain bullish US stocks, targeting fresh all-time highs in 2016, the anticipated path is portrayed on the below chart. A few potential catalysts are looming to propel this move e.g. A no Brexit vote, Trump falling behind in the polls or the US economy continuing to improve.
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