The shares will rise from May. Here’s why staying invested can be the best strategy
Spring has started on the stock exchange.
The Dow Jones Industrial Average and S&P 500 started at high levels this month, defying the saying “sell in May and gone” to climb on its first day of trading.
In interviews with CNBC, market analysts largely said it was time to put the adage to bed and encouraged investors to stay in the market during what could be a volatile month for stocks.
Jonathan Krinsky, chief market technician at Bay Crest Partners, said investors may simply need to lower their expectations:
“Stocks are not the same as companies, just as the market is not the same as the economy. And if we go back to March last year when the market bottomed out, think how bad the news was, remember how bad the news was going to keep going up and yet stocks had already reflected that and they moved higher from that point on. So I think we are now on the contrary. Things are great. They could keep getting a little better. even from here on a fundamental basis, on the macro front. But stocks are smarter than that. They priced that in and that’s why they’ve bounced back so much to this point. That was part of our Nirvana call where we thought growth and value [are] I’m going to do this crescendo move with the two of them working together and that would be as good as it gets. “
Jim Lebenthal, partner at Cerity Partners, pointed out several potential catalysts that could fuel inventories this summer:
“You have to respect the price movement last week. … It honestly wasn’t good. It wasn’t terrible, but it was definitely ‘meh’. It was lukewarm after the tech revenue was blown. So we get certainly not a catalyst for technology revenue. Now you have a number of industry and energy names reporting this week. I think they will be good, but honestly I don’t expect a strong market response. I don’t think so, however fatal. I don’t think you have to sell something here that I absolutely hate. I hate that saying. I think it’s not useful at all. I think in the worst case scenario you have a side consolidation phase here, but you are coming in the summer and get a little more clarity about the taxes for the next year And these negotiations are going on and you may hate it when I say that, but though [Fed Chairman] Jay Powell was very crystal clear last week, I still think the market doesn’t believe him. And in the summer when he started talking about rejuvenation, it would be time to do so. If it doesn’t, the market may get a little more wind in its sails. “
Steve Weiss, Chief Investment Officer at Short Hills Capital Partners, warned that the market is in a “digestive phase”:
“We’re still looking forward to deciding how to invest in relation to the general market based on what Jim Lebenthal pointed out: the Fed. So you have [Omega Advisors CEO] Lee Cooperman with his interview you have [Berkshire Hathaway CEO Warren] Buffett, you have [Berkshire Vice Chairman Charlie] Munger yells and says, “Hey, inflation is going to pick up.” Nobody sees it as ephemeral except [Treasury Secretary Janet] Yellen and Powell and his colleagues at the Fed, and I think that’s the problem. If we get into that, we have some humble numbers [on Monday] in terms of economic reports, but it will be a huge number that we look at on Friday in terms of payroll. A million right now is the basic story. When we see a lot more than that, or a lot below that, you can see an action highlighted in one way or another. But with the insatiable appetite that foreign countries have, sovereigns and corporations, e.g. [the] US 10-year and other bonds go up and down – we’ve seen the auction – as long as interest rates are kept under control relative to yields, not Fed rates, you get a confirmation in the market, and I think so Market moves up. But you can see it is trading down. “
Pivotal Advisors’ founder and CEO Tiffany McGhee said she would buy stocks in May based on two principles:
“I think we need to pay attention to investor reactions. It’s not just the good news, but how do investors see it and how are they reacting? So I’m not selling in May, I’m actually buying, and I’m looking at two things . Number one is the ability to buy the things I love that are for sale. That’s just very, very clear. Number two, I also buy the stories that people don’t pay attention to. Here we are too Still around that stick picker, there are definitely options there, and you can’t roughly paint all of that [strokes] like industry and things like that. It is not the pure pieces, but it is really the larger subjects that I pay attention to and look for those selected possibilities within those larger subjects. “
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