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Many stocks or industries have seasonal trends, and summer is certainly no exception to that rule. Historically the stock market slows during the summer season as families vacate their homes for road trips and visits to entertainment destinations. There is even a well-known saying among investors: “Buy in May and go away”.
Although trading seems to slow during the summer months due to vacations and other seasonal activities, those months have also been known to experience at least a respectable rate of growth during the same period.
Many large investors shed higher-risk elements from their portfolios as they prepare to take time off since they will not be as actively monitoring market activity.
Over recent years, some of the winners during summer trading periods include segments in or closely tied to health care, utilities, and energy markets. Those markets that tend to drop are such stocks as material and industrial sectors along with a general lag in consumer discretionary spending. Some of these appear logical for many traders since travel and summer pastimes focus traders and their families away from large purchases as dollars are put to work elsewhere.
Sam Stovall of Standard & Poor’s Equity Research summed it up quite succinctly in stating “a lot of investors are more focused on their tans than their portfolios.”
There are certainly exceptions that tie to where families are spending those dollars: hospitality, entertainment venues, and travel. Whether that means an expensive trip abroad, vacations to popular theme parks, or just getting away from home for a few days, travelers hit the road or take to the air in droves while the weather permits and children are away from school for a few weeks or more. Companies engaged in these markets make a large percentage of their profits during the summer months, much as retailers look to the holidays for their primary revenues.
Other highlights for summer investors are outdoor outfitters such as Cabela’s and “big box” stores such as Lowe’s and Home Depot that supply consumers with grills and accessories, yard care equipment, and outdoor furniture.
Timing can be an incredibly valuable time as traders watch for lowering stock prices to time buys just as values will begin to trend up. That may mean waiting for the summer downward trend to begin its reversal and start climbing in the Fall.
If you’re a vacationing trader there are some tools to consider that can keep you in touch with your market segments while you travel:
Portable computers in the form of systems like the Microsoft Surface Pro or high-powered tablets and iPads that combine the power of a computer with the portability of a tablet.
AMPL Smart Bag – don’t worry about missing a trade due to low power when you latch on to this bag equipped with SmartBatteries to keep your tablet, smartphone, or laptop ready whenever you need them.
goTenna – if you have a device but no connectivity you can’t make your trades when the time is right. This simple and portable antenna-like device lets you sync your Android or iOS device via Bluetooth-LE to put you on the air for trading where there is no cell coverage or Wi-Fi available.
With devices like these, you’re able to access your online broker anytime, anywhere. Enjoy the summer season while staying connected to maximize your trading success.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.