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Planning a Summer Vacation for your Portfolio… 4 Summertime Portfolio Planning Activities!

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On Pointe – Wealth Management Edition

Planning a Summer Vacation for your Portfolio… 4 Summertime Portfolio Planning Activities!


While we may be focusing on prepping our homes for the warm (or hot!) summer months ahead there is a sense of anticipation.

Perhaps thinking of what might be ahead for us with the likelihood of summer vacations with family. Even taking some time to reflect and relax.

For some of us, summer brings about a change of pace. You may watch less television and opt to spend more time outdoors.

Maybe you’ll enjoy spending more time on the golf course. I’m thinking of hitting the tennis courts (yes, I haven’t quite ventured into the Pickleball mania), or fishing in Chesapeake Bay. But one thing is for sure, work-life adjusts as well.

My mindset has always been to not completely unplug but keep enough of a routine to keep portfolios and my business running.

Guess what!?!? Some market trends in the summer months may not be that rosy. Looking at some of the seasonal averages might suggest summertime has a historical bias to moving lower than higher. Maybe financial advisors should recommend to their clients to “Sell in May and Go Away!”

Oh, wait a minute, that is a market “thing” … albeit advisors don’t dump their portfolios like a bag of mulch in a flower bed. It may mean the portfolio may have more work yet ahead instead of a summer siesta.

According to the Corporate Finance Institute’s website discussing this phenomenon, “Since 1945 The S&P 500 Index has gained a cumulative six-month average of 6.7% in the period between November to April compared to an average gain of around 2% between May and October.”

So, what might a “summer” portfolio look like? The most important question you might be thinking about is “What should I do?”

While there appears to be a historical bias there are a few considerations when analyzing a portfolio. Not too dissimilar to be adjusting your routine in your life there may be opportunities to adjust a portfolio for the summer months.

The first action is to adjust expectations.

While this year in 2023 we’ve seen a lot of volatility… and not all to the downside. There appears to be a great deal of “rotation” in and out of different sectors. Certain sectors are exerting trends, but not enough to show in the major indexes consistently.

There are meaningful gains with the ultimate question being “Will they persist?” My answer is the gains themselves may continue but they may be tempered in the next few months. So, adjust our expectations for possible gains but keep an eye out for some sectors to decline.

Another action I use is to scan for those sectors of the markets that haven’t had my attention during the seasonally strong periods for the markets… The summertime trades may last a bit longer with meager gains. Versus winter-based trading, ideas tend to be short-lived.

Yet another possible action might be to lock up some gains in investments. Especially if you have excess exposure or showing possible changes in trend. The proceeds can be moved to more “value” oriented stocks or areas where possible strength may be developing.

Last, you may want to consider some “spring cleaning” whereby selling some of those investments which have not quite fared as well. This is more of a “healthy” activity that I use throughout the year. But knowing the potential for summer seasonality makes this a necessary exercise.

A quick peak behind the curtain… I usually like to have a little bit extra cash going into September. Why? September tends to be a rough month for the markets, and I try to be prepared. Also, October is the start of the “seasonally strong” months of the market. There are tricks to this pursuit with market action dictating the course of action.

So, how much of a vacation is your portfolio going to get this summer? Well, with my help not much! You should be enjoying the vacation while I plan to keep your portfolio traveling along!

Take care,

James S. Gibbons CPFA
Alpha Pointe Capital-Founder/Wealth Manager

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