Evidence is mounting that "sell in May and go away" might be a good idea again in 2012.
CNBC.com Article: World Stock Markets Face 'Risk-Off' Road Ahead: Index
Global stocks are entering a potentially negative period, according to one index with a solid track record that is indicating there is more than European debt weighing on investors’ minds.
World Stock Markets Face 'Risk-Off' Road Ahead: Index
Published: Thursday, 12 Apr 2012 | 1:43 PM ET
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By: Jeff Cox
CNBC.com Senior Writer
CNBC.com Senior Writer
Global stocks are entering a potentially negative period, according to one index with a solid track record that is indicating there is more than European debt weighing on investors’ minds.
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The Global Financial Stress Index, compiled by Bank of America Merrill Lynch, has seen 10 of its 40 components rise to a level associated with risk-off mode in the financial markets, which means investors usually sell more volatile assets like stocks and move to the safety of fixed income.
The GFSI's Critical Stress Signal last flashed risk-off on July 12, 2011 and remained there until Jan. 4. While U.S. stocks, as measured by the Standard & Poor's 500 [.SPX1377.44
-10.13(-0.73%)
], fell 2.7 percent during that period, global indexes tumbled 9 percent. BofA says the CSS has been accurate more than 60 percent of the time in predicting global stock drops.
-10.13(-0.73%)], fell 2.7 percent during that period, global indexes tumbled 9 percent. BofA says the CSS has been accurate more than 60 percent of the time in predicting global stock drops.http://www.cnbc.com/id/47029609
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