“Sell in May and go away” is an investment adage that suggests that investors should sell their stocks in May and reinvest them in November, as the period between May and November is typically associated with lower returns in the stock market.

Historical data have generally supported the “Sell in May and Go Away” adage over the years and since 1945. The S&P 500 Index has recorded a cumulative six-month average gain of 6.7% in the period between November to April compared to an average gain of around 2% between May and October.21 Mar 2023

Here are three reasons why you might consider following this advice:

1. Historical trends: The adage is based on historical trends in the stock market, which show that the period between May and November tends to be associated with lower returns compared to other times of the year. According to some studies, stocks have historically underperformed during this period compared to the rest of the year.
2. Market volatility: The period between May and November is often associated with greater market volatility, which can make it more difficult for investors to navigate the market. By selling your stocks in May and waiting until November to reinvest, you can potentially avoid some of this volatility and minimize your risk.
3. Seasonal factors: There are several seasonal factors that can impact the stock market during the summer months, including lower trading volumes, vacations, and decreased investor participation. These factors can lead to a slower market, which can contribute to lower returns.

However, it’s worth noting that this adage is not a hard and fast rule, and there is no guarantee that you will see better returns by selling in May and going away. It’s important to consider your individual investment goals, risk tolerance, and investment horizon before making any decisions about buying or selling stocks. It’s always a good idea to consult with a financial advisor or do your own research before making any investment decisions.

Essentially, the financial plan for young people follows the same approach as for everyone. It answers the questions:
Where am I now?
Where do I want to be?
How do I get there?

The difference in the plan for young people is that it should cater for their probabilities of needing provisions in the short and medium term.
The probable life-changing events which occur in the short term such as:
Buying a house
Buying a car
Getting married
Having children

The emphasis in the plan for young people is therefore on accessibility to funds. Which in financial speak is called liquidity.
The investment instruments should therefore allow access.
Unit trusts cater for this and are ideal starting points for young people.
Try to avoid policies as they are restrictive.
A retirement annuity, for example, binds you for too long into the future and if you need cash you won’t be able to access funds until 65.
Unit trusts allow you to stop and start without being penalized on your cash value

The risks that should be addressed in the plan are provisions for
Disability
Medical aid
Short-term cover for the car

Don’t ignore your pension fund benefits
As you may be duplicating on the disability cover

The financial benefits of cohabitation play a role in how people live in the US. About 2/3 of people who have moved in with a romantic partner say finances and logistics contributed to their decision and the share is even higher for younger couples.

And while the decision can help one’s pocketbook 10 of those that moved with a romantic partner later regretted the decision according to a survey of more than 3000 consumers conducted by HarrisX, a polling firm for realtor.com. 

Sharing costs has a huge benefit

In theory, the cost per person is halved as there are many expenses which are shared.

Rent, lights and water, rates and taxes, transport, TV, Kitchen utensils, furniture etc…

Considering that if one were on their own they would have to spend money on these items for themselves only, The survey found that couples saved around $1000 per month. 

It must be more about something other than the money

When analysing the research it is apparent that moving in together is not all about the money. Relationships definitely hold the key to successful cohabitation. As the research shows 48% didn’t work out:

So living together is a challenge which needs to be well thought through. Whilst the financial benefits are very real the relationship will still be tested to the point where the money doesn’t matter anymore.

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The harsh but necessary increase of 0,5% in interest rates by the Reserve Bank this week was harsh and unexpected. It does, however, show how determined the MPC is to bring back inflation into the target range of 3% to 6%. 

Dealing with rising interest rates can be challenging, but some strategies can help individuals manage the impact on their personal finances. 

Refinancing loans

If you are struggling with repayments on your bond or vehicle you may do well to approach the lender and explore the options to refinance the loan/s over a longer period of time. This will result in a lower repayment which could help in coping with your monthly cost of living. 

Debt consolidation

Another option to consider is approaching your bank holding your bond and exploring options to lend more against the value of your house. The additional amount can then be used to settle all of your debts. This amount now sits in your new access bond at a much lower repayment than the combined repayments you used to pay. However, you must be mindful of repaying the loan sooner than later as it will cost you much more in the long run.

Building and emergency fund

Extra cash should be saved in your access bond or a money market account. Aim towards 6 months of your living expenses. If you refinance or consolidate you should have extra to save. Rising interest rates have a positive effect in these spaces and you should capitalise on the window of opportunity as interest rates are likely to rise even further before they come down.

Cut down on spending

Adjusting spending habits and cutting back on discretionary spending can also help reduce the impact of rising interest rates on personal finances. Easier said than done in the face of steep price increases in food, fuel and electricity (the odd times between load-shedding). 

Overall, dealing with rising interest rates needs you to face it head-on by being proactive and making a plan. You can mitigate this by being mindful of the impact of rising interest rates and ways to soften the landing.