FTSE 100 analysis challenges old investments adage

Fri, 13 Apr 2007

An investments specialist has attempted to quash the long-standing investments mantra that it is best to sell shares in May and buy them back again in September.

According to tradition, the value of shares on the FTSE 100 tends to stay static or drop slightly over the summer months as speculators take time off from financing concerns to enjoy the summer at Royal Ascot , Wimbledon, the Henley Royal Regatta and cricket test matches.

However, investments organisation F&C Investments has put this theory to the test by examining returns from the share index over the past two decades.

And it has been discovered that investments typically increased in value during the summer in 14 of the last 20 years on record.

"Put bluntly, 70 per cent of the time it would have been wrong to have sold in May," commented Jason Hollands of F&C Investments.

"The incidence of summer down months is, in fact, not dissimilar to the picture for the whole calendar years."

Last year, investments specialist Fidelity International unveiled a new investments profiling tool on its official website, which claimed to be able to match speculators to appropriate investments opportunities.

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