RECENT POSTS
- Your First Move For Tuesday May 29th
- Chesapeake Should Rally Into $20’s: Pro Trader
- Najarian: Yahoo! a Must Own Stock
- Marc Faber: 100% Chance of Global Recession
- Your First Move For Friday May 25th
- Desperately Seeking Dividend Yield
- Tech Is Trying to Tell You Something: Terranova
- Charts Suggest S&P Revisits Flat on Year: Top Analyst
FAST MONEY FEATURES
FAST MONEY POLLGet in the post game. Respond to our "Question of the Day" right now.
FULL SHOWSMissed an episode of Fast Money? Watch the latest show here.
FAST MONEY PODCASTS
Download Fast Money onto your MP3 Player.
FAST MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
SHOP FOR FAST MONEY MERCHANDISEGet your game on with Fast Money gear.
FAST MONEY SLIDESHOWS!Check out our scrapbook. These "pix" are guaranteed winners.
NEWSLETTERSign up for our daily newsletter!
Text Size 
 |
There’s an old Wall Street adage that you might be familiar to you. It says, “sell in May and go away.”
You’ve probably that before, and it sounds especially tempting if you want to summer in the Hamptons. But it’s not just about fun in the sun.
It’s based on the belief that stocks do much better from November to April than in the other months of the year.
And it’s not just superstition.
An updated study by Plexus Asset Management of the S&P 500 Index shows that the returns from November - April from January 1950 to March 2009 were 7.9% on average whereas those of the May-October periods were 2.5%.
Is that confusing? Take a look at the chart below and it should be clearer.
 |
From November to April stocks perform better on average than they do the rest of the year. Okay, so now that we've got that straight - how would you trade it?
Using this strategy, most if not all of the stocks in your portfolio would be sold at the start of May and the proceeds held in bonds or a deposit account; then you'd go on a buying spree again in the autumn, typically around Halloween.
But is this a smart way to play it this year?
Not according to Fast Money trader Joe Terranova. "I think 2009 is going to be different than any other year," he counsels. "This is a traders market and investors will have to be far more tactical that that adage allows."
Joe Duran, of United Capital Partners isn’t taking the saying to heart either. "This year you’re talking about a 30% decline over that ‘good period.’" In other words, you have to toss out the playbook because this year is unlike most others.
So how should you trade? Duran says, "if you have a long term perspective over the next 6 months, buy the dips.”
- Desperately Seeking Dividend Yield
- Tech Is Trying to Tell You Something: Terranova
- Charts Suggest S&P Revisits Flat on Year: Top Analyst
- Airlines Taking Flight?
- Three Stocks For Thursday
- Next Stop for Oil - $88.55
- QE3 Likelihood Still ‘Pretty Good’: Jan Hatzius
- Dennis Gartman Buying Gold and Stocks
- Doug Kass: Facebook Feels Like AOL Time Warner
- Guy Adami: A Real Life Iron Man
______________________________________________________
Got something to to say? Send us an e-mail at and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On Apr 30th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (LVS), (AAPL), (WFC), (SDS); Seymour Owns ( AAPL), (BAC), (EEM), (FXI); Seymour Is Short (X); Finerman's Firm Owns (AXP), (PBR), (RIG), (UNH), (TBT); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (C) Preferred; Finerman's Firm Owns(MSFT) & (MSFT) Put Spread; Finermans Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Najarian Owns (BX) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MS) & (MS) Calls; Najaria Owns (NTRS); Najarian Owns (ORCL) Call Spread; Najarian Owns (PALM) & (PALM) Calls; Najarian Owns (RHT) Calls ; Najarian Owns (UNH) Puts; Najarian Owns (VAR) Call Spread; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread
CNBC.com with wires
Data is a real-time snapshot *Data is delayed at least 15 minutes
