Investor Zodiac: Did You Sell in May & Go Away…? (07/08/17)

By Alan Steel

Harken ye back to 1980.

Remember how high interest rates were then? 16% in the UK, a bit higher stateside.

Back then lots of folks would have said that Cash Deposits and Bonds were a nice proposition for cautious investors.

Well, here’s what the total returns look like from 1980 to the present:

  • Shares (Index) – Up 6,111%
  • Bonds – up 1,542%
  • Cash – up 423%
  • Property – up 336%

So let’s check the Rule of 72 on this one – which would you choose for your money?

Sadly, the cash option (the lowest returns from above) has become a king of sorts, as trillions of pounds, euros and US dollars have accumulated in deposit accounts…which are now earning nothing.

That’s because the current base interest rate in the UK is 0.25%. In America it’s 1.25%. 

Meanwhile, the Dow Jones, despite the springtime “Go away in May” headlines, is now setting its 34th “All-Time High” this year.

So, did you go to cash?

Did you sell in May?

Maybe it’s time to get some good advice.

Alan Steel, Chairman, Alan Steel Asset Management

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