Sell in May and Go Away? 💥What should investors do? 💥
👇 1) Common Wall-Street advice suggests selling stocks in May and to lock in the year’s gains as markets tend to rally in the beginning of the year, while later the excitement of a new year gives way to uncertainty.
👇 2) But during the last few years, we have seen U.S. stocks (SP500) rally as the combination of a dull summer market with institutional buying from pension funds squeezed markets higher.
👇 3) Seasonally, the SP500 has returned +2.5% for the month of July, on average, over the last ten years — it’s third best month for the year. Similarly, the odds that Bitcoin prices continue to rally in June are weak from a seasonality point of view.
👇 4) As an average, Bitcoin tends to rise only +6% with four out of the last five times Bitcoin prices declining in June. The odds improve with Bitcoin rallying by +11% in July, and in seven out of the ten years prices are positive.
👇 5) The worst month appears to be September with prices declining by -3% and in the last six years Bitcoin declined every year in September.
👇 6) While Bitcoin was able to squeeze out positive returns over the summer, prices have tended to drop over the last few years in June and investors should consider hedging their downside risk as the decline in implied volatility has made put options cheaper.
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