{"id":3266,"date":"2016-06-03T19:35:36","date_gmt":"2016-06-03T23:35:36","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/the-sell-in-may-myth-busted\/"},"modified":"2022-02-26T13:22:15","modified_gmt":"2022-02-26T13:22:15","slug":"the-sell-in-may-myth-busted","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/the-sell-in-may-myth-busted\/","title":{"rendered":"The \u201cSell in May\u201d Myth Busted"},"content":{"rendered":"

The \u201cSell in May\u201d Myth, in Practice<\/strong> \u2013 Looking back on May 2016, the \u201cSell in May\u201d myth proved to be just that \u2013 a myth that would have proven disadvantageous to investors had they followed this \u2018logic.\u2019 In May, the S&P 500 rose a little over 1.5%, and global stocks, as measured by the MSCI World were essentially flat. Markets don\u2019t pay any attention to calendars, so the strategy of selling stocks just because the month of May arrived is like wearing a raincoat all month because it historically rains a lot. The market continued its recovery from the tumultuous January, as negatives began to fade and mixed economic data displays as many positives as negatives. Earnings have been a soft spot, but we expect them to recover in the back half of the year. Stay steady, review investing adages with skepticism and hang your hat on reliable data.<\/p>\n

Are the Rio Olympics in Danger?<\/strong> \u2013 It\u2019s difficult to imagine Brazil in a more compromised position than it is today. And, with the Olympics just several weeks away, Brazil seems far from ready to host. With a leader that\u2019s essentially been removed from office (Dilma Rousseff), implications of corruption at the highest levels of government, a recessionary economy, high inflation and a frustrated populace, the Olympics could not have come at a worse time. But, it doesn\u2019t end there. Just this week, 100 prominent physicians, bioethicists and scientists from around the world wrote a letter to Director-General of the World Health Organization to exert pressure on Olympic authorities to move the Olympics from Rio de Janeiro or delay the Games because of public health concerns over the Zika virus. The spreading of the virus is a major concern, and with tourists expected from dozens of countries the risk of outbreak and global spread is acute. This is a story to watch for the sheer drama of it all.<\/p>\n

Japanese Sales Tax Delay<\/strong> \u2013 Prime Minister Shinzo Abe is once again postponing an increase to the Japanese sales tax (from 8% to 10%) by 2.5 years until 2019. In our view, this sales tax is a bad idea whether it\u2019s implemented now or two years from now. It runs counter to Japan\u2019s goals of sprucing up consumer spending to support inflation and the mere mention of it makes markets cringe. On the other hand, in the absence of rising government revenues to help curb a growing national debt and deficit, Japan\u2019s credit rating is at risk. We\u2019ve long said that the secular view of Japan is a negative one, with the economy trapped in a zero interest rate environment and very unfavorable demographic shifts due in the near term.<\/p>\n

Recession-Proof Australia<\/strong> \u2013 Did you know that there has not been a recession in Australia since 1991? That\u2019s 25 years! You might be thinking, \u201cwith the exception of the Great Recession, right?\u201d Wrong! Australia even grew then. Q1 2016 proved another sturdy growth quarter for the ever-resilient economy down under, with annual growth rising +3.1%, marking the country’s fastest expansion in more than three years. Australia\u2019s long-term success can be attributed to many factors, but its constant effort to diversify its economy is probably the most critical. Oh, and because of China\u2019s help. Australia has vast natural resources and a huge mining industry, and they\u2019ve been able to ride China\u2019s growth coattails by exporting to the fast growing country along the way. Having rich neighbors helps growth (just ask Mexico).<\/p>\n

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The \u201cSell in May\u201d Myth, in Practice \u2013 Looking back on May 2016, the \u201cSell in May\u201d myth proved to […]<\/p>\n","protected":false},"author":1,"featured_media":4259,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-3266","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=3266"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3266\/revisions"}],"predecessor-version":[{"id":11335,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3266\/revisions\/11335"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=3266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=3266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=3266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}