Tuesday, May 13, 2014

Schiff: Sell in May and go away

After last year's stunning 29% rally in U.S. stocks, Wall Street virtually assured investors at the end of last year that the good times would continue. 

If not for the super-charged mergers and acquisitions market, which according to the Wall Street Journal accounted for $638 billion of transactions thus far in 2014 (the highest level of activity in almost 20 years), and the rock bottom long term interest rates provided by the Federal Reserve, markets could be tanking. 

What's worse is the fact that the first five months of the calendar are usually the best for market performance (hence the Wall Street adage "sell in May and go away.") 

If this is how we have fared during the seasonally strong part of the year, beware the latter as the summer doldrums set in and the Fed (in theory at least) is set to wind down its QE program.

Peter Schiff is a smart investor and author of several best selling books. He correctly predicted the economic meltdown of 2008 - 2009