Saturday, August 04, 2007

"Sell in May and go away" - So Far, So Good

Reported by Bloomberg:

An investor who placed $10,000 in the Dow average at the end of April each year since 1950 and sold at the end of October would have a net loss of $272, according to [the calculations of Jeffrey Hirsch, president of the Hirsch Organization in Nyack, New York]. Someone doing the opposite would have gained $534,323.

The Dow has risen 0.3 percent on average in the May-to- October period since 1950. For November through April, the Dow has climbed 7.9 percent -- a performance that reflects year-end bonuses, tax refunds and pension-fund contributions flowing into stocks.


As for this year, well...

3 Comments:

Blogger Harry Eagar said...

If you had bought a nice house for $10K on the edge of a growing city, eg, Atlanta, then today it would be worth (at least) $600K.

And you would also have gotten the benefits of depreciation,tax writeoffs and about 600 monthly rent checks.

On the other hand, if you'd bought a house on the outskirts of Detroit, you wouldn't have much.

August 06, 2007 9:18 AM  
Blogger Oroborous said...

Yeah, the stock market isn't necessarily the best place for anyone to put their money to work.

On the other hand, it can be extremely liquid and very low maintenance, which isn't the case with real estate.

August 07, 2007 12:31 AM  
Blogger Harry Eagar said...

I considered that. But I also considered my late father-in-law's time investment. He was a very successful investor in stocks.

I think it would have taken less effort for him to have managed a similar value of real estate.

A different kind of effort. He liked beating the market, and he wouldn't have gotten the same pleasure from hassling with tenants.

That's why some of us are brain surgeons and others of us are not. In fact, the smartest guy I know set out to be a brain surgeon but changed his mind when he realized he was not obsessive enough.

August 07, 2007 9:41 AM  

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