Why You Should Learning In Summer and Not Investing explained by professional Forex trading experts the “ForexSQ” FX trading team.
Why You Should Learning In Summer and Not Investing
When I was a kid I could not wait for summer to get here. I grew up in Huntington Beach, California, also known as “Surf City” and there were miles and miles of gorgeous beaches only about a mile from my house, and every day during the summer I would spend hour after hour sitting in front of the television watching old reruns of Get Smart and Hogan’s Heroes.
Now I know that most of you are thinking to yourself, wow, what a waste of summer.
And perhaps you are right. But nowadays grown adults, that should know better, waste plenty of time during the summer trying to actively trade or manage their investments. Talk about a waste.
Traditionally there is no worse time of the year to be in the stock market than during summer. For generations now the smart money would say, “Sell in May and go away. Stay away until St. Ledger’s Day.” That in fact is the full saying. Bet ya didn’t know that?
St. Ledger’s Day was the mid-September day when the bigwigs in the British financial community would come back from their seaside summer vacations. Over the years the saying has been Americanized, dropping the St. Ledger’s part and pegging the day to get back into the markets as Labor Day.
The idea behind the saying was that with all the serious money at the shore, volume would be lighter, trends weaker, and thus more apt to overreact to news flow.
This herky-jerky type of movement was more likely to whipsaw traders and investors out of their positions, chewing them up with losses and commissions.
And is it true? Should you stay out of the market for the summer? In a word, yes! In a few more words, you should definitely not over trade during the summer and keep positions to a minimum.
Despite the fact that information moves seamlessly and continuously over the internet – even to the Hampton’s – no matter what the date on the calendar, there still is some objective data that tells us that the market will underperform from May to September. Over the last 10 years, 60% of the time the market has been down during that period.
Of course, every rule has an exception, that being 2014, when you would have missed out on some big gains by being out during the summer months. But on balance, it is a good idea to focus more on learning about the market than trading it during summer.
Many market professionals use this time to catch up on their financial reading. The nice thing is that you can add to your knowledge while relaxing. Sitting by the pool, at the beach, or in your backyard is the perfect setting to cozy up with some heavy market reading. Plus, it keeps you away from the market (I know how tempting it can be).
Why You Should Learning In Summer and Not Investing Conclusion
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