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  • Christian Armbruester

Darling Buds of May, Revisited



After the euphoric market performance of 2021, followed the rather depressing 2022, but believe it or not 2023 has been a great year thus far. Global equities are up 7.5%, and after a whole lot of turmoil, bonds have also returned some nice yields. Credit spreads have come in, the Euro has recovered, Gold is up, and Ethereum even more. Is it time to take some money off the table and as they say, sell in May and go away?


The macro environment is still not good. We have falling headline inflation, but the battle in the core is not yet over. Growth is slowing and the fundamentals aren't great. Earnings have been plummeting and forward guidance has been far from optimistic. On the plus side, outside of tech - where a clear-out seemed long overdue (just ask Elon Musk) - relatively few people have lost their jobs. That makes it highly unlikely that things are going to fall off a cliff.


Then there is sentiment. Precious few people are predicting the next bull market and investors are positioned more defensively. This means if there are any signs that the worst may just be behind us, everybody will be chasing the rally. Ultimately, the statistics say this: since 1930, if an investor missed out on the S&P 500′s 10 best days per decade, total returns would be significantly lower than for those investors who waited it out.

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