It was, I believe, a member of Jupiter’s highly regarded multi-manager team who, one Cheltenham Festival back in the late 1990s, passed on the best racing tip I have ever received. “If you add the words ‘In bed’ after a horse’s name and it sounds funny, put some money on it,” he advised and, in the best part of 20 years since, I have never attended a race meeting and not mentioned it at least once.
I do so now not only in the hope it enhances your next trip to the horses – tell any normal human being and they will spend the next five minutes scouring the race card for combinations that would make Sid James blush – but also as a way to pre-empt all the ‘Why you should have sold in May’ articles I expect to see once the last nag (an ‘in-bedder’, naturally) has limped home this St Leger’s Day.
The ‘Sell in May’ rhyme is held in great affection by journalists, offering as it does the guarantee of an easy story either side of summer. The reality, however, is the advice is as much use to investors ahead of the fact as mine is to racegoers. These lines are only of any real benefit if they explain something – if they involve some kind of causal link.
So, while every summer now seems to contain episodes to make equity investors deeply uncomfortable – exacerbated by thinner trading volumes and, at least in my head, with Greece always in there somewhere – that is at best correlation. As with the 90%-plus correlation between the S&P500 and Icelandic beer prices since 2009, however, there is no causality.
Compounding my irritation this year will be the question of just when in May I was supposed to be selling. Right at the beginning so I could lock in those UK market falls that stemmed from investors fretting about the general election result? Or would I have been allowed to hold on till, say, Friday the 29th and benefit from what was actually a decent month for most leading markets.
And who came up with ‘Sell in May’ anyway and why be as vague on the selling date as they were precise about the time to buy back in? And why am I getting so worked up when years ago I reached the conclusion shared by so many dissertations on this subject that, for those without a crystal ball, ‘time in’ the market’ trumps ‘timing the market’ 999 times out of 1,000?
I should also chill out as I am soon off on holiday and, in that mood, I will end on the first and latest successes of the ‘In Bed Syndicate’. The first, that day in Cheltenham, was the 28-1 shot Blowing Wind while the last came from almost all my party at last year’s Royal Ascot having at least a piece of a 1, 2, 3 of Domination, Another Cocktail and Sizzler. I, though, went on form. The horse came in 10th.
Julian Marr is editorial director of Adviser-Hub and co-author of ‘Investing in emerging markets – the BRIC economies and beyond’
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