"Sell in May and go away" is a well-known financial-world adage, based on the historical underperformance of some stocks in the "summery" six-month period commencing in May and ending in October, compared to the "wintery" six-month period from November to April.
We have taken this basic market premise and turn up the intensity on it to produce a strategy which will look at maximising returns during up periods whilst maintaining momentum when the markets are traditional stagnant. This is done using a mixture of Index's as well as a short to long term bonds. As this strategy is x4 leveraged, it has very tight and controlled risk management to minimise the downside potential.
Starting balance of $100,000 USD
The Sell in May and Go Away strategy deploys the age old wisdom of the markets having a tendency to under perform in the summer months and over perform in the winter. To that end, and to spread the risk within the strategy, every six months the portfolio shifts from a range of US markets to a range of Treasury Bonds.
As this is at x4 leverage (x1 per investment vehicle) risk management is the main activity with this strategy. This includes both a hard stop loss level as well as floating moving average and average true range driven one. This is due to the inherent fact that when markets crash, they do it very quickly and as such we do not want to be holding x4 the market if that happens.
This strategy also has inbuilt into its mechanics the ability to go to cash and stay there for a certain amount of time, until pre-set conditions are met again. As this is only one part of a larger portfolio of strategies, being in cash within this strategy for a few months can be handled.