Sell In May
Few advisors will ever tell us to "Sell in May, and go away". While I believe in the affects of seasonality, the argument has been made that abandoning the stock markets every May, may not be as reliable as some studies would indicate. For one, the cost of getting in, and out, again, can amount to something large.
If not abandon, should we, at least, rebalance our portfolio? How often should we rebalance, anyway? In this, and the following post, I would like to examine these questions. First, Part I presents a concept necessary to understanding Part II which I will post later.