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Posted on 5 June 2011 | 6,575 views

Sell in May and Go Away 2011 Market Crash – Part 1

The cliché to “Sell in May and Go Away” seems to be on investors minds once again. Evidence is accumulating that the stock market has hit an intermediate-term peak amid the deepening European sovereign debt crisis, signs of slower U.S. economic growth and the imminent end to the Federal Reserve’s liquidity injections.

After a 3.9% gain in April 2011, the Dow Jones Industrial Average struggled in May 2011 with growth concerns, falling 1.8% in value. In May 2010, when stocks took their biggest tumble since 1940 (falling 7.9%), the market continued to sell-off another 4.4% into early July — and the concerns are the same, European debt and soft U.S. economic indicators.

With the start of June 2011 upon us, the Dow Jones is already down 3.3% and indicators are not pointing for the markets to go up any time soon. In fact, investors would have been better off not trading Stocks in June with the last 6 closing down on the month.

June 2010 – Down 3.5%
June 2009 – Down 0.6%
June 2008 – Down 10.1%
June 2007 – Down 1.6%
June 2006 – Down 0.1%
June 2005 – Down 1.7%

So, what are other Stock Market pundits saying?

1. Don’t Sell in May and Go Away
2. Time to Sell in May and Go Away?
3. Some investors may be tempted to ‘Sell in May’

Although the Dow Jones is down 3.9% since the end of May 2011 and down 3.3% so far in June 2011, that doesn’t mean it’s too late to Sell in May and Go Away right now. When the DJIA fell 10.1% in June 2008, it continued to fall another 3,797.12 points into November 2008 (down 33.4%) over the same concerns as of lately — European debt, economic growth, unemployment and Federal Reserve policies.

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