PODCAST: Tap the Money Tied Up in Your Home with Keith Gumbinger
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Links mentioned in this episode:
- Sell in May and Go Away? Here We Go Again …
- Keith Gumbinger, Vice President of HSH.com
- This Hot Housing Market with Daniel Bortz
- Black Knight Mortgage Data Reports
Transcript:
David Muhlbaum: With home prices on a tear, you might have more money in your house than you think. By that we mean home home equity: the value of your property minus whatever you still owe on it. But turning that into cash that you can put to use can be complicated. We'll dig into the equity market with an expert. Also, you might have heard of "sell in May and go away." Well, should you? All coming up in this episode of Your Money's Worth. Stick around.
David Muhlbaum: Welcome to Your Money's Worth. I'm Kiplinger.com senior online editor David Muhlbaum, joined by my cohost, senior editor Sandy Block. How're you doing, Sandy?
Sandy Block: I'm doing great, David.
David Muhlbaum: Well, good. It's a beautiful May day here, though I closed the windows to keep the bird noise down. And May is the month mentioned in one of those old Wall Street adages, "sell in May and go away."
Sandy Block: Right, and we're in May, and it will still be May when this drops, so anyone who wanted to follow this idea still has time. To sell stocks, that is. But that's not actually our counsel, right? Because that would be market timing.
David Muhlbaum: Yes, that's correct. Our investing writer Dan Burrows has a good take on "sell in May and go away" out -- we'll link to it -- and he's got a fairly sanguine take on the philosophy, he basically calls it a "tired old saw" that gets more attention than it deserves, but still worthy of exploration.
Sandy Block: So is it right or wrong? Are we going to get a binary answer, or is this "it depends?" Not that there's anything wrong with that.
David Muhlbaum: Look, if "sell in May and go away" were flat out wrong, it wouldn't pop up every year, like Punxatawey Phil. It's … you know…. debatable. To quote Dan, "There is evidence that the stock market, on average, tends to underperform in the six-month period between May and October. However, analysts, market timers and academics who have studied the phenomenon extensively can't settle the matter conclusively one way or the other."
And by the way, the basic meaning of "sell in May and go away" is right in there: If stocks don't do well between May and October, maybe you should hold something else. But notice we're talking about May to October? We've already added something there, and we're already complicating the idea of "sell in May and go away." Because it's not, go away
