If You Stayed In May...You Made $$$$

The close: Stay in May

Friday, May 30, 2008
If you sold in May and went away, following one of the oldest investment strategies in the playbook, you missed out on reasonable gains this time.

Canada's benchmark index, the S[amp]amp;P/TSX composite index, rose 5.9 per cent during the month, for an annualized return of more than 70 per cent. More specifically, energy stocks rose 10.9 per cent, information technology stocks (mostly Research In Motion Ltd.) rose 9.4 per cent and materials stocks rose 7.5 per cent.

The S+P 500 did not fare as well, but it still paid to be invested in May. It rose 1.1 per cent in May, for an annualized return of more than 15 per cent. There, information technology led the way, rising 5.6 per cent, materials rose 4.8 per cent and telecom services rose 3.7 per cent.

On Friday, the last day of the month for stock market trading, the S[amp]amp;P/TSX composite index closed at 14,714.73, up 137.56 points or 0.9 per cent, largely because of energy stocks. Despite the fact that crude oil, for once, hugged its starting position, Canadian Natural Resources Ltd. rose 2.2 per cent and Suncor Energy Inc. rose 1.7 per cent.

Toronto-Dominion Bank, among the big banks the least affected by mortgage-related writedowns, rose 2.8 per cent. Bombardier Inc. rose 2 per cent, edging toward a multi-year high of $8. BCE Inc. crossed the $35 threshold, as investors grow more confident that a takeover deal of some sort is still going to happen. And Barrick Gold Corp. rose 3.3 per cent.

The Dow Jones industrial average closed at 12,638.32, down 7.9 points or less than 0.1 per cent. There, American International Group Inc. rose 1.9 per cent and United Technologies Corp. rose 1.2 per cent. Bank of America fell 1.7 per cent and General Motors Corp. fell 1.6 per cent.

The S+P 500 closed at 1400.38, up 2.12 points or 0.2 per cent. Dell Inc. was among the big movers here, rising 5.7 per cent after it reported strong first quarter results on Thursday. As well, Monsanto Co., a leading agriculture company, rose 2.9 per cent.

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