Welcome to the May 2021 episode of Student of the Market. Our team produces these short videos each month to put the financial markets into perspective and help you be a more informed investor. These videos explain the current state of the markets and help you learn from historical parallels. If you want to check out previous episodes, click here.
Highlights from our May 2021 episode:
Stocks are entering a seasonal period of lower returns
The period known as “Moms to Mummies” (May 1st – Oct. 31st) has historically seen lower returns for stocks than during the remainder of the year, known as “Turkey to Tax” (Nov. 1st – Apr. 30th).
Large value versus large growth
Large value stocks have experienced a period of 10%+ outperformance over large growth stocks over the last 6-months. Historically, such periods have continued to bode well for large value stocks.
Rising Interest rates and active bond funds
During periods of rising rates, most active core- and core-plus bond funds have tended to outperform the aggregate bond index. During periods of falling rates, the opposite has been true.