Summary
In May, investment decisions will be based on financial results, interest rates, and seasonality. In this article, you will learn practical judgment criteria that can be used without being influenced by short-term price movements.
Headline ①: Corporate financial results are “the answer to the current stock price”
Conclusion: Stock prices fluctuate greatly in May depending on the financial results.
Reason: Evaluation changes depending on whether a company's performance is "in line with expectations or better than expected."
Specific example:
- Sales and profits exceed expectations → stock price rises
- Weak future outlook → Stock price decline
Points:
- “Guidance (future prediction)” is important, not just “results” → One word explanation: Future outlook issued by companies → Details: The market focuses on this when predicting sales and profits for the next fiscal year.
Practical usage:
- Check the stocks you own before and after settlement of accounts
- Check whether new investments are expensive even if they have good financial results.
Headline ②: Interest rate trends affect all assets
Conclusion: The decision between stocks and cash changes depending on the direction of interest rates.
Reason: Interest rates are a standard for comparing the attractiveness of assets.
One word explanation: Interest rate = cost of borrowing money
Sorting out the effects:
| Interest rate trends | Stocks | Bonds |
|---|---|---|
| Rise | Downward pressure | Price decline |
| Decrease | Increasing factors | Price increase |
Why it's important:
- Interest rate rise → discount rate rise → theoretical value of stocks falls
Practical usage:
- Check out what central banks are saying
- Check whether there are "interest rate cut expectations"
Heading ③: Understanding the “seasonality” unique to May
Conclusion: "Sell in May" is helpful, but don't trust it blindly.
One word explanation: Seasonality = price movement trends by past period
Background:
- Institutional investor fund transfer
- Summer dead market (volume decrease)
Common misconceptions:
- ❌ It will definitely go down in May.
- ⭕ It just tends to go down.
Practical usage:
- If there is a profit, take a partial profit
- Split new investments to diversify timing
Summary
- Three points are important in May: "Financial results, interest rates, and seasonality"
- Make decisions based on “reasons” rather than short-term price movements
- Action:
- Confirm financial statements of stocks held
- Understanding the interest rate outlook
- Avoid lump sum investments