"Selectively" Sell In May And Go Away, "Kind Of"

As we move into May, we are once again hearing the common refrain of "Sell in May and go away." Robert Maltbie, managing director of Singular Research, feels that while the refrain may hold, he expects that investors will need to be more selective (see WSJ video below). In particular, Maltbie feels that the rule of thumb works best after a nice run-up in stocks. Without that run-up, there is less downside to not selling. Of course, we have had a nice rally recently, but are still quite a bit off the highs, so even this rule of thumb has a layer of subjectivity to it this year. As for stocks and industries that have probably run-up, Maltbie highlights the consumer stocks, some banks, and some casinos. On the other hand, investors may want hold positions in infrastructure and green investment, due to the stimulus spending, and micro-small caps, due to their prices having been driven down too far.