Rationalizing a Slight Liquidation

May 3, 2013

An article in Seeking Alpha by Doug Short included a chart that showed SPY’s average annual performance during May since 1928 has been negative 0.14%.  This is the third worst performance after February, negative 0.16% and September, negative 1.09%.  To me this means ” Play till May ” has some validity,  enough for me to pull out of the SPY wave I have been riding since January 29.

According to Mr Short’s table,  July is the best month of the year for big breakers ( positive 1.49% ).  So believing its safe to be in the water, but not seeing any waves that will justify a ride, I’ve decided to pause and take some profits and re-enter the market sometime after June 15 when the big rollers should come into view.

I still have roughly 30% of my money tied up in names that pre-date my SPY conversion and my rationale is that these names ( energy ETFs ) are an inflation hedge.  So, I’ll sit with this ” black gold “.

My April 30 data indicated it was safe to stay invested and I temporarily acted against my own data out of respect for ” Play till May “.

Richard Maurice Gore

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