Summer Investing Strategies: How to Navigate the Market
As we head into the summer months, many investors may be wondering how to navigate potential market slowdowns. According to CFRA Chief Investment Strategist Sam Stovall, historical data shows that the S & P 500 tends to see minimal gains between Memorial Day and Labor Day, with June averaging just 0.1% and July at 1.2%. This trend has led to the popular "sell in May and go away" adage, suggesting that investors may want to consider defensive strategies during this time.
However, Stovall remains optimistic about the market, with projections of the S & P 500 reaching 5,470 by the end of the year and 5,610 in 12 months. He notes that election years tend to see an average 3.7% increase in the summer, which could be the case this year given the upcoming presidential election.
In light of potential market volatility, Stovall recommends focusing on defensive sectors such as aerospace and defense contractors, consumer staples, and healthcare. Companies like Lockheed Martin and General Dynamics, which are expected to benefit from increased defense spending, are among his top picks. Lockheed Martin has seen a modest 1.4% increase this year, while General Dynamics has gained 13.4%.
When it comes to consumer staples and healthcare, Stovall highlights companies like Eli Lilly, Walmart, Costco, and Becton Dickinson as strong performers. These companies have shown resilience in the face of economic uncertainties and changing consumer behaviors. JPMorgan recently upgraded Walmart, citing its strong balance of defense and offense in the current market environment.
Overall, while the summer months may bring some market challenges, strategic investments in defensive sectors could help investors weather the storm and capitalize on opportunities. Stay tuned to Extreme Investor Network for more expert insights on navigating the ever-changing investment landscape.