Model With “Sell In May” Component Allocated To Small Cap Value

As the “Sell in May” anomaly requires allocation to equities in the beginning of November, the model now allocates to small cap value universe ( we use Vanguard Small Cap Value ETF (VBR). It previously signaled cash allocation on May 3rd posting https://stockmarketmap.wordpress.com/2015/05/05/model-with-sell-in-may-component-goes-to-cash/

Primer on Map model with “Sell in May”  https://stockmarketmap.wordpress.com/2013/12/23/market-map-model-2-using-small-cap-value-weighted-portfolio/

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2 thoughts on “Model With “Sell In May” Component Allocated To Small Cap Value

  1. IS this all in, or is there an allocation component to this? What % of portfolio would you allocate on the Small Cap position using your system?

    • Todd, this is “all in” for this particular stock universe and strategy.

      It is up to each investor to decide how much of their total equity that they choose to implement towards any one strategy. Prudent investing involves diversifying over many strategies and investments. The small cap value universe, being proven to have produced the highest decile alpha premium vs. other universes over 90 years ( via Fama / French research ) can work well for a young investor in a tax deferred account towards accumulating assets.

      In our personal accounts, we divide our equity for use towards 3 strategies: 1 of which is described in this post, 1 that uses the QQQ ( without “Sell in May”), and 1 that uses 3 “sectors” that are switched at fixed times during the year ( not included in this blog ). Thanks for your interest.

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