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Sell in May and run away… well, I am not so sure

I have read this little rhythm somewhere and I liked it. Some professionals from Wall Street and analysts say that May is typically a weak month when stocks fall. If I recall it correctly, last year it was actually April when stocks headed south. But I may be wrong.Crash

Sometimes it is confusing listening to advice like this. We are bombarded by information like this every time and newbies can be quite confused. Once, I remember, I wanted to make a list of weak and strong months and coordinate my buying accordingly. Glad I didn’t have enough time to do so.

As I have changed my investing strategy I see this weak month as an opportunity. If it shows up as they say and stocks will head down I will be actually happy about it. Even though I will see a lot of my holdings in red numbers (which is psychologically very hard for me) I am repeating to myself, that this would be a great opportunity to buy. Even if the stocks head down, it won’t last forever and I can be buying cheaper than today.

So what I am doing during the period when stocks are growing? Waiting and saving. I save money to have enough to buy when the stocks fall so I can buy more. And when stocks start growing again I will sit, wait and save money. If I have saved more than a few dollars I am willing to invest into my mutual fund HSTIX, which I can be buying without commissions and it pays dividends. This fund serves me as a money storage. As soon as I see a buying opportunity I sell a portion of my holdings in the fund and use released money to buy.

Right now I am waiting for Kinder Morgan as my next buy. It yields 5.8%, its 5-year average dividend growth is 7.13% and it was increasing the dividend in 14 consecutive years. I want the price drop down, so I can buy cheaper.

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