Wow! Here we are, one month past the historic weakest month of the year, September. October isn't usually a whole lot better as it's the final month of the summer doldrums as described by the Halloween indicator, a term used by some for the theory that the markets generally do better in the months from November to April than in the May to October period. The Sell In May And Go Away crowd supports this theory.
So what happened this past summer? At the end of April my stuff was up 5.42% for the year. By the end of August it was all gone. My year to date gain had disappeared. I sure was feeling like I should have joined the Sell In May And Go Away gang. Needless to say, I wasn't looking forward to September, the weakest month of the year.
September! The TSX gained 3.82% while in the US the DOW shot up 7.77%. And then, along came October. Pumpkin month saw the TSX gain another 2.49% while the DOW bounced another 3.06%. While the markets did very well in September and October, I did better. My stuff shot up 9.19%. A fantastic two month gain!
On October 8, I triggered my exit strategy by unloading my long held Canadian Resource Fund. That day I simply parked the proceeds in an Interest Fund with the same fund company. A few days later I transferred it to a Canadian Bond Fund, again, with the same company. I don't have a crystal ball and I'm not suggesting that resources and commodities are going to fall off the cliff. What I do know, is that if they do, my Canadian Bond Fund units will be worth the same amount, or more, the day after the meltdown.
Exit Strategy? Who said anything about an exit strategy? Well, I think I did...at least I've been gradually introducing the idea throughout the year. On May 5 I wrote Who Should(n't) Be In Funds? This one triggered some interesting response from readers who told stories about finance guys who no longer return calls. After hearing some of these stories I was compelled to write my July 9 post Why we fell in love with funds. Do we still love finance guy today? Finally, my July 16 post A Little More About The Last (Next) Ten Years revealed that in the past ten years the markets were pretty crappy and I suggested that we all need a plan.
So what happened this past summer? At the end of April my stuff was up 5.42% for the year. By the end of August it was all gone. My year to date gain had disappeared. I sure was feeling like I should have joined the Sell In May And Go Away gang. Needless to say, I wasn't looking forward to September, the weakest month of the year.
September! The TSX gained 3.82% while in the US the DOW shot up 7.77%. And then, along came October. Pumpkin month saw the TSX gain another 2.49% while the DOW bounced another 3.06%. While the markets did very well in September and October, I did better. My stuff shot up 9.19%. A fantastic two month gain!
Exit Strategy? Who said anything about an exit strategy? Well, I think I did...at least I've been gradually introducing the idea throughout the year. On May 5 I wrote Who Should(n't) Be In Funds? This one triggered some interesting response from readers who told stories about finance guys who no longer return calls. After hearing some of these stories I was compelled to write my July 9 post Why we fell in love with funds. Do we still love finance guy today? Finally, my July 16 post A Little More About The Last (Next) Ten Years revealed that in the past ten years the markets were pretty crappy and I suggested that we all need a plan.
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