Sell in May and Go Away?

Written by Andy Pratt & Alex Shen on .

One of the oldest and longest lasting Wall Street adages goes sell in May and go away. Proponents of this strategy argue for going to cash in May, skipping the summer months altogether before buying back in October.

The adage gained popularity of late due to the subpar summer returns during the 2000s.

Monthly Returns 2000 2014

This may seem like compelling evidence but an investor employing this strategy sacrificed 6.1% annually since the Financial Crisis ended. This result is consistent with other studies that show positive – if weaker – historical returns from May to October.

Monthly Returns 2009 2014

There may be times when Sell in May works but like other market timing strategies and as we found in 2012, the results do not hold over time. If two investors invested $1,000 in the S&P 500 in 1990 but one of them went to cash from May to October and the other stayed the course, the investor who stayed the course would be $3,919 richer at the end of 2014.

Sell In May Stay The Course

No one knows which direction the market is going to go this summer but history shows that the patient investor who keeps her money in the market wins out in the long run.

Lowell Pratt one of Barron’s Top 1,200 Advisors

Written by Andy Pratt on .

Barrons 2015 Top 1200For the second year in a row, Burney Company President Lowell Pratt Jr. has been honored as one of Barron’s Top 1,200 Financial Advisors.

The annual list, broken down by state, aims to highlight America’s top financial advisors based on assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. All 50 states plus the District of Columbia are represented.

In addition to a questionnaire completed by advisors, Barron's analyzes regulatory records and internal company documents to rank advisors.  Performance is not explicitly reviewed since some advisors' clients may have different goals for their portfolios.

Lowell moves up 5 spots on the list to number 14 in Virginia.

"We're proud to be recognized by Barron's once again for the important work we do for our clients," Lowell said upon receiving the recognition.

A Bullish Pattern for Stocks

Written by Andy Pratt on .

JP Morgan publishes a quarterly comprehensive market summary and one chart from January was particularly striking.

Bullish Pattern

Following the Great Depression, the S&P 500 has demonstrated a pattern of 10 year plateaus followed by 20 year market advances. If the pattern holds, the most recent plateau phase ended in 2013 and we would be in the beginning stages of a 20 year advance.

Will the pattern hold? Who knows.

One thing we do know is investors who stuck it out through past plateaus were rewarded for their patience.

Download our market commentary here.

The Economy is Taking Off

Written by Andy Pratt on .

The Department of Labor Statistics’ monthly Employment Report is perhaps the most followed and reported on piece of economic data. This report produces the official estimate of unemployment in the United States. A couple of years ago when we started providing updates on Jobs Day, the unemployment rate had implications on how the Federal Reserve would conduct monetary policy. As unemployment slowly fell the narrative was about the painfully slow pace of the economic recovery and when the Fed eventually ended QE, the concern in the market was if the economy was strong enough to stand on its own.

The growth in jobs since then has been extraordinary.

November's Huge Jobs Report

Written by Andy Pratt on .

Did you know that 2014 is on pace to record the strongest year of job growth since 1999? The economy has added 10.2 million jobs since the recession's low point and, despite Americans thinking that the unemployment rate is higher than it actually is, the unemployment level is just 2 tenths off the Fed’s target for 2015 at 5.8%. The economy is picking up steam and November continued the trend.