A Sunny August Ahead?
So August is upon us, but what does that mean for the markets?
Of course a lot of people are away which, for a start, means there is always a lot less volume. So what happens is that shares can move much faster than normal on much fewer trades.
Overall, August surprisingly is a very good month and according to market historian, David Schwartz, it is the third best trading month of the year. "Good gains can often be achieved in August," he told me. "But of course with the volatility you have to get the right entry price."
I agree with David - I often find I can make a lot of money in August.
One thing to look out for is companies actually reporting in August. There aren't many but if you find one that produces a strong statement, you often find the share price responds very well on smaller volumes. Also, it is worth looking at companies reporting in early September - sometimes August is a good time to get in, in the run up to the results.
If you're off on holiday it's always tough to know what to do - sell up and buy back on return? My view is to keep your portfolio and keep abreast on what is going on via wireless internet now available in many places, ADVFN's mobile service or even the local internet cafe. I see little point in selling good stock just for the annual two weeks away!
Markets have been perking up recently though investors are rightly cautious, especially given the political situation in the Middle East. Although I have some cash on the sidelines, I still have quite a bit in the markets with much of my portfolio going pretty well.
In particular, Vislink produced an excellent statement - it reports at the end of August and I hold a good whack of shares in this up-and-coming company. Also looking good are Britvic and Wincanton.
If you're off on holiday have a good one, and try not to worry about your stocks too much. Remember, August is usually a good month!