by Vince Stanzione
For most traders it still seems wrong to make money from markets going down and in fact most spread betting customers still tend to want to bet to go up.
Traditionally we are now moving in to slower months hence the old saying “Sell in May and go away.”
If you think that this is just a saying then take a look at the facts. This works on buying in November and selling in the next April. For this study a tracker stock on the S&P500 (SPY) was used. You would then switch to cash and re-invest again in November and so on. The results from 1950 to 2004 was $10,000 grew into $461,774, if you had done the reverse and Bought in May and sold in October your US$10,000 would have lost money- $8,375.
So statistically it makes sense to reduce your exposure to the stockmarket over the coming months.
