Sell in May? How to respond to market volatility

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Market volatility: What’s an investor to do? Sell in May, as the old adage goes, or carry on regardless?

What’s an investor to do? Sell in May, as the old adage goes, or carry on regardless? Illustration: iStock

It couldn’t go on forever. And now the tide appears to be turning on the era of soaring stock markets, cheap money and low interest rates. After years of bullish growth, volatility has made an unwelcome – for most investors at least – return. Where not so long ago, amid historic low interest rates, equities were one of the few games in town, their shine is beginning to tarnish.

By early May, the S&P 500 was down 18 per cent from its January 3rd peak, while the Nasdaq, home of tech stocks, plummeted by almost 30 per cent from its November high, on the back of a sell-off in the sector.

 

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