Many investors are familiar with the phrase “sell in May and go away.”  This has certainly been true in May 2010: Greece debt problems, the sinking Euro, the downgrade of Spain’s credit rating and the BP oil spill debacle have taken their toll on markets worldwide.  Oh, and then there was the mysterious May 6th “flash crash.”

But I’ve heard other analysts say that it’s more accurate to think in terms of “buy when it snows, and sell when it goes.”  This gives a little more wiggle room and room for interpretation.  After all, just yesterday, Calgary (Canada) saw a fresh snowfall.  By and large, though, world markets topped out sometime in late April.  My own accounts were at their peak on April 27.

The next week saw worries about European debt, and then the flash crash.  From there on in the stock markets went south with the weather for a few weeks.

Potential Effects of BP Oil Spill on UK and World Economy

Stocks In Tune With the Weather?

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Is there a subtext to the “seasonal” aspect of “seasonal investing?“  Is there some closer connection between stocks and weather (or the planet)? (the way some have argued, amazingly, for a stocks-and-moon correlation)

May was a bit of a cold month, up until the end.  But on top of snow returning to Calgary in Canada (still somewhat unusual for this time of the year), there are other strange parallels.

The Icelandic volcano (I won’t try to spell it) blew just in time for Earth Day on April 23, stranding thousands of flights and saving the earth from oil and gas fumes and chemtrails for a good week.  But almost at the same time, the BP oil rig blew up and took the riser down with it, creating the disastrous oil leak that is now in its 41st day of non-stop gushing.

The earth is bleeding and taking some share prices down with it.

Driving season hasn’t really bolstered oil prices this year the way it normally would, but strangely, the old adages are still holding.  Analysts expect the markets to hang out in a trading range all summer and possibly not wake up again until after the November mid-term elections in the U.S.

If that’s the case, then “buy when it snows” will continue to reign as sound advice once again.  It might even confirm that markets are recovering (2008-2009 was an exceptional season that didn’t really correspond to many seasonal theories).

Do you know about the January Effect?

May One of Worst Months For Stocks

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September and October are routinely singled out as the worst months for the stock market, but apparently May and February are pretty bad, too.  I heard this from an analyst recently, who was speaking back at the beginning of the month prior to the flash-crash when we were still waiting with bated breath some kind of substantial market correction.

So you may be wondering what the best months for stocks are – January is a great month for stocks, for one; so is November, according to these seasonal theorists.  And depending on your commodity (such as agriculture stocks), early spring can be a great time, too.

The upside to the downside of May, though, is that it can be a great buying opportunity, and indeed, many stocks are still on slight sales following the Euro declines and the continued worries over sovereign debt.  So even though you may not be an active trader, it’s still wise to pay attention to seasonal trends, because you might be able to better spot and anticipate sales.

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