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-- -- -- -- On our first guest says that might not be the best strategy this year standstill as and he capital IQ chief Evans strategist joins us now CN -- -- Well why this happened every year every year and clockwork you could -- Created a portfolio -- sound make it to some not good Hampton's comeback and -- start buying again.
Is that an imitation really kind of the -- yeah.
I think basically it's a matter of capital inflows you're absolutely right since World War II.
The market -- risen an average of 7% from November through April.
But only one point 2% from may through October.
I think a lot of money comes in -- pension plans add to their holdings early in the year.
If you have a bonus you end up getting paid by march -- -- out your 401K.
You've got to invest in your IRA before April 15.
And if you're gonna give money back from uncle said he do so early so a lot of the money has already come into the market by the time the end of April rolls around Tikrit.
Appointment and what we've been talking about here is the big difference I guess this year is that.
Uncle then got his finger on the trigger the money keeps coming right.
It sure does also.
We had a very good indication earlier in the year January and February were up for the market.
And historically that has been very positive with a average twelve month total return being 24%.
Since world war two and it tends to add a little bit of support to that may through October period as well.
So what would you do instead it would not get out of this market all together.
That's right I've actually found that if you gravitate toward the defensive sectors within the S&P such as consumer staples meaning all -- meaning on the food beverage tobacco as well as health care from may through October and then back in the market from November through April you would have added.
Four percentage points per year or instead of getting 7% you would have gotten 11%.
Since 99 -- With a lower volatility.
Of course there's no guarantee that will happen going forward but.
I think it's like Whitewater rafting you let the market take you where it wants to go and in the summer it wants to go nowhere.
And but if that's -- case then you know.
With the Whitewater rafting analogy why not just float away on an S&P index fund and be done -- it.
Well you could -- mean you can just leave it in the S&P 500 get that one point 2% return on average.
Which happens to be better than what you would get any money market fund.
But actually instead of getting only 1% since 1990.
Health care -- staples averaged.
-- point 4% and four point 6% respectively so -- you ended up getting more than four times the return with those two sectors than you do with a market.
Okay that's excellent tell us had to do dissertation so you're saying try to try to do this.
Before may first and then when I had -- then back into it more riskier equities.
OK come the the end of April beginning of may you would want to sell a SPY which is the S&P 500.
ETF and would want to -- equal amounts of XLV.
Which is the health care index and XLP.
Which is the consumer staples index hold that until the end of October.
What he would sell both XLP XLB and buy back in two.
SP why so it's really just a simple six month rotation.
It's simple straight and for -- for saying go buy yourself a little Hamptons house maybe -- so if you so much for sharing now and my pleasure trading.
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