“Sell in May and go away,” is an age-old Wall Street adage that has been passed down through generations. I first heard about it from my father, a New York businessman, on a hot afternoon back in the last century. He explained that during the summer, the brokers and those with substantial investments retreat to the Hamptons to unwind, leading to a lull in market activity.
However, in today’s fast-paced world, completely ignoring both politics and the markets during the summer months is not a viable option. Recent political events have been captivating, and certain sectors and financial instruments have experienced fluctuations as a result. Despite this, engaging in quick trades can be risky, and many individuals may find it more beneficial to take a break and enjoy some time at the beach.
Financial strategies linked to the fluctuating fortunes of political figures, such as “The Trump Trade,” have gained prominence on Wall Street. These trades are associated with movements in stocks related to guns, prisons, and fossil fuels, as well as small shifts in bond yields and expectations of market changes like mergers and acquisitions and currency exchange rates.
If the vice president’s polling numbers remain strong, it is likely that a “Harris Trade” will emerge, focusing on clean energy stocks, healthcare companies, and similar sectors. However, for individuals looking to build wealth for important long-term goals like retirement, education, or healthcare, it may be wiser to steer clear of these short-term trades and instead opt for a strategy of staying invested in low-cost index funds that provide diversified exposure to the overall stock and bond markets.
