'Sell in May and go away'. It is one of the oldest adages in the City, suggesting that stock markets underperform during the summer months. But if you are a busy professional trying to build long-term wealth, treating your ISA like a day-trading account is a terrible idea.
Time in the market always beats timing the market. Always.
The danger of trying to time the market based on seasonal adages or political news is that you risk missing the market's best days. Missing just the 10 best trading days in a decade can halve your overall returns. Data from major financial institutions consistently proves that retail investors underperform index funds because they let their emotions dictate their trading schedule.
Your job is to generate income through your career. Your portfolio's job is to grow quietly in the background. If you pull your money out of the market to avoid a hypothetical summer slump, you have to make two correct decisions: when to get out, and when to get back in. Nobody gets both right consistently.
Instead of reading the financial press and panicking, focus on your cashflow. Automate your monthly investments into globally diversified, low-cost index funds. Then log out of your brokerage app, go outside, and enjoy the summer. Boring investing is profitable investing. Protect your assets from your own emotions.
Stop reading and start acting. Book a zero-obligation Chemistry Call to discuss how we can apply these frameworks to your specific situation.
