Turn Your Back on This Faulty Market Wisdom

Stocks soared during the month of May. And according to history, that momentum should continue during the summer months... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] Turn Your Back on This Faulty Market Wisdom By Sean Michael Cummings, analyst, True Wealth --------------------------------------------------------------- You've likely heard the market adage "sell in May and go away." The saying stems from seasonal factors in the U.S. stock market... First, investors tend to take vacations between May and October. In theory, trading slows down during the summer months... and stocks start to slouch. Second, markets tend to favor the winter. The so-called "Santa Claus rally" often appears around the holidays, as investors cash their bonus checks. These factors can skew your returns. Many traders want nothing to do with the market in summer as a result. They simply sell their holdings and leave. But this year, I suggest you ignore this advice... The "sell in May and go away" crowd was just proved dead wrong. Stocks soared 5% last month – making it one of the greatest May rallies in a century. And based on history, that momentum will continue well beyond the summer months... --------------------------------------------------------------- Recommended Links: ['The Strongest BUY Recommendation of My Career... Just Got Even Better']( The third of three major profit catalysts is poised to ignite a buying frenzy around one specific asset class. That's why the senior analyst behind 80 triple- and quadruple-digit winners is calling this the strongest buy alert of his career to date. [Click here to learn more](. --------------------------------------------------------------- [A Wall Street Veteran Reveals His No. 1 Secret]( He started out on the trading floor in 1966. He was there for the oil panic in '73. He watched the market crash in '87. He was trading the day the planes hit the World Trade Center. One of his tools is even hard coded into every Bloomberg terminal. [And today, he's sharing the single most valuable system he has ever built](. --------------------------------------------------------------- The May-through-October period has earned its reputation as a gloomy time for stocks... Since 1928, this six-month period has yielded an average return of just 2% a year. By contrast, the average gain from November to April is about 4%. So sure, there's some truth to the "sell in May and go away" adage... But the difference in performance is marginal. A strong May has a much bigger impact on performance, though. With enough momentum going into the summer, stocks have the potential to really take off. May's 5% return this year was exceptional. It was the best performance for the month since 2009. May has only seen better returns 10 other times since 1928. I wanted to see what happened after other high-performing Mays. So I found every example of the month returning 4% or more going back to 1928. Again, a strong May is the exception, not the rule. I only found the signal in 18% of years since 1928. But when stocks do perform well in May, it typically spells big outperformance over three- and six-month time frames. Take a look... Stocks have returned about 6% a year going back to 1928. But they tend to seriously climb after a strong May. The signal returned 7% in an average three-month period (ending in August) and 14% in a six-month period (ending in November). As for the win rate, stocks were up in 53% of cases after three months... only a little better than a coin flip. But they were up in 76% of cases after six months. So this is a reliable signal in the longer time frame. According to history, May's 5% performance should prove to be a significant tailwind for stocks. Now is not the time to sell... The bulls have momentum on their side this year. And in this kind of environment, stocks can absolutely soar. Good investing, Sean Michael Cummings Further Reading The market had its first pullback back in April – putting an end to a multimonth winning streak. That might make some investors nervous. But according to history, this isn't a bad omen for stocks... [Read more here](. "The biggest investing returns come to those with patience," Sean writes. You don't have to invest dangerously to see life-changing returns. Instead, let the power of compounding do its work for you... [Learn more here](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK Nvidia (NVDA)... chip giant Micron Technology (MU)... semiconductors Eli Lilly (LLY)... pharmaceuticals AstraZeneca (AZN)... pharmaceuticals McKesson (MCK)... health care giant Boston Scientific (BSX)... medical devices Danaher (DHR)... science, health, and tech NetApp (NTAP)... cloud storage Logitech (LOGI)... electronics Spotify Technology (SPOT)... audio streaming Philip Morris (PM)... cigarettes and alternatives Coca-Cola (KO)... soft drinks Procter & Gamble (PG)... consumer goods Unilever (UL)... household brands Costco Wholesale (COST)... membership-only stores Walmart (WMT)... "World Dominator" of discount retail TJX Companies (TJX)... discount department store Best Buy (BBY)... electronics retailer Levi Strauss (LEVI)... jeans T-Mobile (TMUS)... telecom NEW LOWS OF NOTE LAST WEEK Gilead Sciences (GILD)... biotechnology West Pharmaceutical Services (WST)... syringes Sirius XM (SIRI)... satellite radio Molson Coors Beverage (TAP)... beer Bloomin' Brands (BLMN)... casual dining restaurants Five Below (FIVE)... discount retailer Hertz Global (HTZ)... rental cars --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. 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