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