Cyclical/Defensive Total Return Ratio
It’s Not “Whether” You Sold In May, It’s “What”
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Those who heeded the old advice to “Sell In May” have missed out on an additional 5% gain (and counting) so far in 2021. However, the best way to have played this seasonal anomaly over the years was not to have “sold-out,” but rather to have “reduced the beta” of one’s equity holdings versus cutting equity exposure outright. That strategy has paid-off handsomely the last three months, even as this “Nothin’ Matters And What If It Did” stock-market powers higher.
Five Reasons To Expect Higher Yields
Much of what we think “we know” about the bond market says yields should be headed higher.
Simple Bond Model Says “SELL”
In our minds, the big story is not the nominal new highs in the blue chips, but rather the rapid changes now occurring on both an “intra-market” and “inter-market” basis. In the case of the latter, we have an important new signal from a simple correlation model we developed earlier this year.
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