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TheStreet Open House

The Question That Comes up Every May

NEW YORK ( TheStreet) -- The charts below offers some pretty compelling evidence that the old Wall Street chestnut "Sell in May and walk away" has some currency.

These charts, with data courtesy of Bloomberg, are probably some statistician's dream.

Nonetheless, I think another Wall Street mantra trumps the "sell in May" theory this time. Specifically: "Past performance does not guarantee future results." Here's why this summer could be different (notice I did not say, " is different," perhaps the ultimate statement of hubris. If you are in your 20s, ask your parents about the first Internet bubble.)

Here's my reasoning.

First, this is now the 13th straight quarter of better-than-expected corporate earnings. Eighty percent of S&P 500 companies have reported above analyst estimates, and earnings have been up 11.4% year over year.

Second, this is an election year. During elections years politicians give or engineer goodies for voters: lower unemployment, lower gas prices and more funding for education. Apparently, the strategy works. Since 1932, the median gains during election years has been as follows: May: 1.09%; June: 1.88%; July: -0.67%; August: 0.87%.

If you are a trader or speculator, I'd recommend spending some time trolling for opportunities among either very strong or very oversold consumer staples stocks. The S&P Consumer Staples sector has averaged 4.7% from May to October, while the S&P 500 as a whole has averaged just 0.9%. As always, though, take every financial mantra with a little grain of salt.

Oliver Pursche is President of Gary Goldberg Financial Services, a boutique money management firm located in Suffern, NY. Additionally, Mr. Pursche is the Co-Portfolio Manager for the GMG Defensive Beta Fund, and a Founding Partner of Montebello Partners, llc. In his role as President of GGFS, and as a member of the GGFS Investment Committee, Mr. Pursche helps oversee the investment portfolio of over 2000 clients with over $500 million dollars in assets. Mr. Pursche frequently provides market and economic commentary on CNBC and Fox Business News, as well as often being interviewed by The Financial Times, US News and World Report, Thomson Reuters, Bloomberg Businessweek, and the Associated Press regarding his and the firms views on the latest market news and events. Mr. Pursche's views on the market and investment strategies have been featured in the Wall Street Journal, Investors Business Daily, Smart Money, USA Today and other national business publications. In addition to writing for TheStreet.com, he is also a weekly contributor on Forbes.com and BankRate.com. His daily market commentary can be read at www.betafundcommentary.com or you can listen to him on www.financialtalkshow.com weekdays at 10:00 AM.

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