We’re into July and that means summer is in full swing. How could that potentially affect your trading? Read on to find out our top tips. We’ll also outline some of the must-watch events of the coming week.
“Sell in May and go away…”
Ah, that classic trading expression. But just how accurate is it in 2021?
The theory goes that when summer comes around, people start to close their laptops and head on holiday. Less people being around means that there’s less news and activity to move the markets.
It’s true, fund managers and big institutional traders often sell some of their shares and other assets before they go away. They do so to minimise the risk of their investments taking a big hit if markets fall suddenly while they are not sat at their screens ready to react.
In reality, the summer slowdown is no longer a thing. This expression was more relevant in the old days, when trading was limited to people screaming “buy” or “sell” on trading floors. With the technology at our disposal now, it’s possible to trade from your home, your summerhouse, or your private beach in Honolulu if you really fancy it.
Top stocks to trade in the summer
Stocks tend to fare well in recent summers. The S&P 500 rose in the summer in each of the past five years, so that’s where we will start. Here are some top tips for some individual stocks you should be looking at.
1. Apple (AAPL)
Everyone’s favourite fruity Cupertino-based tech giant could have a summer to remember. It’s having a mediocre 2021 so far by its own high standards, being up around 8% YTD.
Summer is almost always a good time for Apple. It’s posted an average summer gain of 16% over the past five years. Last year, it jumped 28% (even in the middle of a covid landscape).
AAPL Stock, YTD
2. Take-Two Interactive (TTWO)
Year after year, summer spending moves toward services that are designed to occupy and entertain us throughout the long summer period. One of the biggest beneficiaries? Gaming.
This has been exemplified by Take-Two Interactive. The maker of many popular titles, including Grand Theft Auto, is popular in the summertime, for good reason. On average, it’s risen by 20.7% during the summer over the past five years.
Even better news for traders? The stock is down 12% so far this year, so it could be a bargain if and when it starts to pick up later in the summer.
TTWO stock, YTD
3. Charter Communications (CHTR)
The US telecommunications and mass media company known as Charter Spectrum has seen an average summer gain of 14.4% over the past 5 years.
The party has started early this year, with CHTR stock looking strong. It was even outmuscling big-name rivals Verizon, AT&T, and Comcast last week!
CHTR Stock, YTD
Should traders have a summer holiday?
You know it, we know it, everyone knows it — trading is intense. It requires deep concentration, split second reactions, a tonne of patience and, oh yes, hours upon hours of research.
Whether you’re a professional trader or you like to trade in your spare time, the effort and mental resources you’re putting in, are likely staggering.
As a result, you should enjoy the summer time and use the (hopefully) nice weather to get some rest, if only to ensure you come back all-guns-blazing when you return in the autumn.
Take care of yourself!
What’s on the trading agenda this week?
Here’s everything you need to keep track of this week.
No major events scheduled.
● AUD — RBA Interest Rate Decision
● EUR — ZEW Economic Sentiment Index (JUL)
● USD — FOMC Minutes
● EUR — ECB Monetary Policy Meeting Accounts
● USD — Core Inflation Rate YoY (MAY); Inflation Rate YoY (MAY)
● CNY — Inflation Rate YoY (JUN)
● GBP — GDP 3-Month Avg (MAY); GDP YoY (MAY)
● CAD — Employment Change (JUN); Unemployment Rate (JUN)
Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here.
The Contentworks team