Asset Allocation - November to May

If you aren't in the stock market right now, you probably should be.

At the beginning of November I moved my 401k money from about 50% bonds / cash and 50% stock funds to be 100% invested in stock funds. I am presently allocated at 40% large cap, 15% mid-cap, %25 small cap, and 20% international. This asset allocation was up 5% for the month of November.

I consider myself an aggressive investor. I am still young and don't expect to retire for 40 years. I can handle a lot of fluctuation in the stock market right now. This asset allocation is not for everyone, and I don't recommend it for people approaching retirement.

The reason I am writing this is because I found this article. I have seen similar research done in the past, but I can never remember where it is when I try to find it. It states that the stock market (since 1950) has done significantly better between the months of November to May (average gain of 8.5%), then from May to November (average loss of -0.1%).

I am not saying that I will get out of the market in May, but I will consider it. If they stock market looks like it isn't growing as fast or is declining, then I probably will reallocate my investments to mostly bonds and dividend yielding stocks.

Update 12/16/2004: Another article with similar information.