market-comment

LPL FINANCIAL RESEARCHWeekly Market CommentaryJune 1, 2010v4Buy in June and Stay TunedThe old adage of “sell in May and go away” has been repeated so many Jeffrey Kleintop, CFAtimes we are still often asked if this is a sound investing strategy. We do Chief Market Strategist not find sound reasoning behind this maxim. Instead, we believe investors LPL Financialshould “buy in June and stay tuned” this year. We expressed caution in mid-April, given our outlook for a pullback in the stock Highlights market. However, now that the pullback that began on April 23 has occurred, “Sell in May and go away” only works about we have spent most of May calming fears of another stock market plunge one-third of the time. With a pullback having and, in general, we believe this is a good opportunity to buy stocks rather than already taken place, we find little value in this sell. Unfortunately, investors cannot simply buy now and go away since the old adage.headwinds for the economy and markets are increasing during the second We believe investors should “buy in June and half of the year. Investors must stay tuned to the transitioning conditions stay tuned” this year. for economic and profit growth warranting a tactical approach to portfolio Staying tuned to the conditions in the management.economy and markets will be important to The reasoning behind “sell in May and go away” stems from the historical investment decision making in the coming months as the ...