The market kicked off in 2013 with a major uptick and it wasn’t until late May that we really saw a big impact on the Dow. This has been a lingering concern of many investors who think that such a good thing can’t last too long. By mid-May, many investors were asking- Sell in May and go away? No way for investors this year (or at least so far). Markets are already up 4.57% for May. If the S&P continues on the pace it has been on all year, then investors are looking to gain over 35% for 2013. Investors haven’t seen those types of returns since 1997 when the S&P was up over 31%.
Nevertheless, investors are feeling this lack of comfort in the new face of a bull market. And the reaction is one of definite nervousness as they wait for the other shoe to drop. Much of this nervousness is a by-product of fear of the unknown. This can be somewhat remedied by looking at what we do know. A key factor is understanding that the market tendency, in historically similar times to this current market, has not experienced drastic turns in either direction but gradual levels of rise and fall. An overview of these past markets can also teach us that the wise investor stays true to the long-term goal, despite the initial gut reaction to pull out.
The important action to take is to be strategic in managing portfolios through the rise and seeking the advice of those who have experienced these trends. It is easy to lose focus of facts when we are being constantly bombarded with non-factual sensational claims coming from varying sources and directions.
But by keeping ourselves calm and reacting with confidence in the market we can look the bull in the face long enough to see that it is no longer new, but becoming a growing familiarity.