Sell in May and Go Away III
Surprise
As our previous two articles/posts have shown, this strategy was not profitable for everyone.
However, in order to render this approach attractive, other variables are often taken into account. Some promise their clients that choosing one specific method will lead to exorbitant differences between both periods. So as to achieve this, they do not follow the guidelines of automatically entering and leaving the market on a given day – instead they analyse the state of the market and rely on technical indicators to seize the right time for their actions.
To push the idea of this six-month period further, we attempted to identify the best three months, and had a closer look at the development of the market between the months of November and January. We then compared these with the other nine months. The results in table 2 were surprising. As the table 3 below shows, despite the restricted and short period of three months, it was not only possible to achieve a notable gain, but the volatility was also comparatively low. In conclusion, true to the opinion of this author, counting days is not worth it.
How then is it possible to truly exceed/surpass/outperform the market? Stay tuned!
