By Matthew Scott
Posted 8:00am 05/30/10
Hindsight is definitely 20-20, but many investors are no doubt kicking themselves for not practicing the old adage “Sell in May and go away,” after May turned in the worst market performance since February 2009.
Highlights:Rose Greene, a certified financial planner for LPL Financial in Santa Monica, Calif., who started taking profits before the May sell-off, has a different approach from the “Sell in May” adage.
“If people have unrealized losses this month, I would take those losses and book them and use them against the capital gains they will hopefully experience by the end of the year,” she says. Rose then advises taking the proceeds from those assets and purchasing investments that are dissimilar to the ones just sold. Then buy back into the market at different intervals on market dips.
“I wouldn’t put all my money in at one time,” she says. “I would also be looking at asset classes that aren’t quite as vulnerable to headline news — for example, smaller and midsize U.S. companies are not as tied into the euro and what’s happening in Europe.”
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
Stock investing involves risks including loss of principal.
Investing in real estate investment trusts (REIT’s) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of the program will be attained.
The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors.
The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
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