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Mark Hulbert Archives | Email alerts
May 1, 2012, 12:01 a.m. EDT
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By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) "” There are several reasons you might want to stick around and not "sell in May and go away."
Some of those reasons apply to this year in particular. For example, the seasonal pattern on which the "sell in May and go away" strategy is based is weaker in the fourth year of the Presidential Election Year Cycle than it tends to be in other years of the cycle.
Another is that this pattern has become so widely known that many investors initiate their selling in April, as they did this year "” thereby clearing the deck of some of the selling pressure that otherwise would hit the market in May.
But there's a third reason to stick around that would apply even if you were inclined to discount the first two: It turns out that not all sectors of the stock market are equally likely to be below-average performers during the summer months.
This isn't just a theoretical observation, either. It was the conclusion of an academic study titled "The Halloween Effect in U.S. Sectors," written by Ben Jacobsen, a professor of finance at New Zealand's Massey University, and Nuttawat Visaltanachoti, a senior lecturer in finance at the same institution.
In fact, the researchers found, for some sectors there is very little difference in the returns between the average winter and the average summer. The two sectors that stood out the most in this regard in their study were the consumer and food sectors. These would be the sectors to invest in if you didn't want to "sell in May and go away," especially if you were inclined to bet that this coming summer will be stronger than usual.
With that thought in mind, I queried the Hulbert Financial Digest's database to find out which stocks in these sectors currently are recommended the most by those investment advisers who have beaten a buy-and-hold in the stock market over the last 15 years.
The list of stocks that follows all are recommended by at least three of this select group of advisers; they fall in either the consumer goods or consumer services industry sectors as defined by Dow Jones, groupings that include the food sector. They are listed in descending order of popularity.
"¢ Comcast /quotes/zigman/89307/quotes/nls/cmcsa CMCSA +1.37%
"¢ PepsiCo /quotes/zigman/238082/quotes/nls/pep PEP +0.79%
"¢ Walt Disney /quotes/zigman/245568/quotes/nls/dis DIS +2.18%
"¢ Wal-Mart /quotes/zigman/245476/quotes/nls/wmt WMT +0.51%
"¢ Kraft Foods /quotes/zigman/279905/quotes/nls/kft KFT -0.05%
"¢ McDonald's /quotes/zigman/233369/quotes/nls/mcd MCD +0.04%
"¢ Coca-Cola /quotes/zigman/222647/quotes/nls/ko KO +0.71%
"¢ Heinz /quotes/zigman/229153/quotes/nls/hnz HNZ +0.53%
"¢ Home Depot /quotes/zigman/229488/quotes/nls/hd HD +1.34%
"¢ Kimberly-Clark /quotes/zigman/231291/quotes/nls/kmb KMB +0.15%
"¢ Procter & Gamble /quotes/zigman/238894/quotes/nls/pg PG -0.06%
"¢ Walgreen's /quotes/zigman/245520/quotes/nls/wag WAG +0.04%
Click here to learn more about the Hulbert Financial Digest.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
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Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD... Expand
Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD became a service of MarketWatch in April 2002. In addition to being a Senior Columnist for MarketWatch, Hulbert writes a monthly column for Barron's.com and a column on investment strategies for the Journal of the American Association of Individual Investors. A frequent guest on television and radio shows, you may have seen Hulbert on CNBC, Wall Street Week, or ABC's World News This Morning. Most recently, Dow Jones and MarketWatch launched a new weekly newsletter based on Hulbert's research, entitled Hulbert on Markets: What's Working Now. Collapse
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