Sell in May? Maybe.

I started out 2016 with what was supposed to be an options trading challenge to turn $500 into $5,000. About a month into it, I realized that the time and effort I was using to do that could also be used to just advance my plans to manage a small investor fund so I threw the doors open for people who were willing to sign a contract and invest their money with me. I guaranteed them a 5% monthly return, 60% a year based on the results of my previous trading and rigorous back testing and modelling on Excel.

Since kick off, I’ve hit my monthly target, rounding off with April being my best month ever (about 19%, on the back of a Valeant short). However, coming into May, I experienced what many people have described which is that the market simply hits a lull. It didn’t make a convincing move in any particular direction, volatility actually dipped for a good bit of it and then when it did move, it see-sawed, posting a quick decline and then an even quicker reversal.

All of that meant that I’m posting my first negative month since I started this run, ending may just a little bit under break even (-0.9%) mostly because I have automatic measures to protect my capital. The good thing about it though is that I reserved some of the previous month gains specifically for a month like this one so I will still meet my obligations. And thus far, I’ve generated about 26% return, about 15% of which went to my investors, 5% to me and 6% to my reserves. Normally, I’d be mum about it all as I don’t discuss specific business as much on here but I’m wondering what explains the ‘sell in May’ phenomenon in the stock markets.

Anyone has any explanations?

Also, if you’re interested in the fund, reach out to me on here or on twitter @eldivyn and I’ll see if we can work together.

My doctor friends are still taking any medical questions and issues at ask.ilera@gmail.com (the main website is  quickly taking shape.) There’s been a great response so far and they’re already working with a good number of people. If you or anyone you know would find advice from US trained doctors helpful in any way, contact them. 

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