In North America we are in the midst of August or the summer season, at one time there was an adage to sell in May and go away till September. At the time there was very good reasons to do this – the markets were manual, now they are electronic. The factories used to shut down for two or three weeks as they went through the annual repair and change of the line, that process is much faster now days. During the summer months schools are off or teachers and students are out of school and doing things. When people lived on farms – there were chores to do, now many people live in urban areas – things to keep the children busy is the order of the day. All these factors and more, tended to mean the trading volumes of the markets was slower in the summer. Slower trading volumes meant new stock issues, new bond issues were scheduled for the fall. When the markets picked up stock prices tended to pick up.Even with electronic changes, shopping 7 days a week, the old habits of having the summer as a slower season changes very slowly as historically stocks perform better in the winter season. It also might mean that summer is really the best time to get the bargains for the expected rise in the winter.

Linking to dividend paying stocks, if you are a market timer, reports on the best time to buy or sell is important. Many dividend stocks do not pay their dividends in July and August, because of the above reasons. With dividend stocks, after you have determined the quality of the stock you are buying, expect to receive the dividend for a few years or more. The price of the stock will move up and down, but if you picked a quality company over time you will receive your dividends and the stock price will likely be higher than you bought it. In this fashion you have receive an annual yield on your shares plus a capital gain on the shares.

There are more questions than answers, till the next time – to raising questions