This is partly because it doesn't work
well in secular bear markets, and partly because investors let their emotions cause them to make poor decisions.
Query whether such an all equity portfolio will perform as
well in a secular bear market in equities, which I suggest to you we are in.
Not exact matches
However, after enormous bailouts of the largest financial institutions
in the country, as
well as the auto industry, and even more monetary ease than
in 2003 (accompanied by TARP, the stimulus plan, QE, and QE2); we started another cyclical bull
market within the
secular bear market.
In contrast, the recent «bull market» (probably better viewed as an upward correction in an ongoing secular bear market) started at valuations too rich to justify an aggressive investment positio
In contrast, the recent «bull
market» (probably
better viewed as an upward correction
in an ongoing secular bear market) started at valuations too rich to justify an aggressive investment positio
in an ongoing
secular bear market) started at valuations too rich to justify an aggressive investment position.
In Asian and emerging
markets, commodity producers are
bearing the brunt of the downturn, but attractive values persist among
well - capitalized,
well - managed enterprises with
good exposure to
secular growth trends.
I decided to run some research that went back to 1950 and then back to 1928 which includes multiple
secular bull and
bear markets to determine whether the «Sell
in May and Go Away» strategy had an edge or not and, if so, how
good an edge.
While this can be a
good strategy
in a sideways or
bear market, this strategy does not work too
well for the option writer
in situations such as
secular bull
markets involving rapidly rising stock values, or catalysts such as analyst upgrades, surprising positive earnings or unanticipated positive business news etc..
If you think we're
in a long - term,
secular bear market, with likely returns
well below my 6 % example, this strategy is for you.