You’ve probably heard the old saying: “Sell in May and Go Away.”
It’s been around forever the idea being the stock market under performs from May through October, so investors think they’re being clever by cashing out for the summer and jumping back in around Halloween.
Sounds like a fun strategy, right? Easy and seasonal, almost like investing by horoscope.
But here’s the reality: this kind of market timing rarely works. It can hurt your long-term performance more than it helps.
When you pull out of the market, based on a calendar, you run the risk of missing some of the best days, those surprise rallies that often make up a big chunk of annual gains.
And if you’re investing for the long-haul retirement, a home, your child's education, missing those good days can throw off your entire plan.
The truth is, no one has a crystal ball. Not the big-name analysts.
Not your neighbor who thinks he’s a stock-picking genius. And certainly not some age-old rhyme about the calendar.
Let’s take another example: October. It gets a bad rap because of some infamous crashes, like the ones in 1929 and 2008. But statistically, October has been more of a rebound month than a crash month over the last few decades. Again, myth doesn't equal math.
Here’s my advice: don’t let headlines or superstitions decide when you invest. Focus on building a plan based on your goals, your timeline, and your risk tolerance.
Stay consistent. Stay calm. And remember, long-term success in the stock market is built with patience, not panic.
The most effective investment strategy is to stay invested, stay focused, and stay the course.
That’s how lasting wealth is built and how you create your rich financial future.
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