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Forget seasonality and just invest smarter: Josh Brown

Kevin Chupka
Executive Producer/Writer

Are you the “sell in May and go away” type? Sure you may be able to point to several examples where that practice served investors well, but you can point to just as many where it didn’t. At least that’s what Josh Brown, CEO of Ritholtz Wealth Management says.

“There’s not a lot of added value in doing that and it doesn’t always work,” he says of the sell in May principle. “It happens to have worked very well over the last couple of years but then I could point you to examples of when it didn’t work and what you missed out on and what the consequences were...I don’t dismiss seasonality out of hand, I dismiss its utility for most investors.”

So what is an investor to do instead? Brown notes that at his firm “we systematically rebalance so the math tells us when to do what. We really don’t try to out-guess what the markets are doing. It’s not that we can get a few right, it’s that the ones that we get wrong will take away the benefit of the ones that we’ve gotten right.”

In short, the real “smart money” lies with a slow and steady approach rather than trying to pick the next Tesla (TSLA), Netflix (NFLX) or Twitter (TWTR). Afterall, anyone who did learned a tough lesson over the past several weeks.

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