How You Can Earn A Year’s Worth Of Financial Gain In 6 Months
“Sell in May, go away.” Is a common term in the investment community because stocks tend to have their weakest gains during this period. The “Halloween Effect” though take place from November to April and this is where stock earn most of their gains for the year. The average gain has been 6.9% for stocks in the S&P 500 for just these six months since 1945. Investing in small high growth companies might earn you double digit returns for six months of investing.
See how to play the Halloween Effect in the market.
This November-April surge, sometimes called the Halloween effect, is even more pronounced when investing in small-company stocks. Since 1926, shares of volatile but fast-growing small companies delivered 10 times more gains from November through April than they did from May through October, according to an analysis by The Leuthold Group.
You of course shouldn’t only invest during November to April, you should just use a combination of strategies. Buying consumer staple stocks like Whole Foods or health care stocks during the down time of May to October can earn you returns. November to April is a time to have your portfolio weighted more in stocks and more aggressive companies like the financial sector and industrials. Always look at the trend of the market when investing though. If the market is trending down you should not get that aggressive.
See the industry that could earn you double digit returns in six months.
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About Shaun Archer Tatum Shaun works in corporate finance in New York City. He has done financial consulting for several start-ups and has worked at several Fortune 500 companies. He has contributed several finance/investing articles on Seeking Alpha which have been published on Yahoo! Finance.