by ucanit » Sat Oct 29, 2011 9:21 am
The "sell in may" theory doesn't always work...but it works more often than it doesn't.
DD, you'd asked a couple of times in the political forum what I thought about the current "surge" or "big jump." I consider it more of a "rebound." The market is actually back in the range it was earlier in the year...before the bear market pull back. That's about a 12% up-tick in the month of October. I expect it to gain about 10% more (with some downward corrections along the way) with the S&P reaching around 1400 by year end.
There is one caveat, however. If the market (as measured by the S&P) stayed flat through the end of this year, its current 1285 level would actually be about par to historical performance. You see, the S&P gained 11.6% in 2009, 12.4% in 2010 and (so far) 13.9% this year...for a 3-year average of 12.7%. This is about the historical average annual stock market growth rate since 1927.