The old trading adage that cautions investors to 'sell in May and go away' has been thrown around over the last week as negativity once again started to enter the marketplace.
The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) declined 1.4% for the week to close at 5,458.1, giving up a five-and-a-half year high of 5,548.5 that was achieved on Tuesday. This could largely be attributed to concerns over the hefty valuations of the nation's big four banks as well as declining iron ore prices which saw analysts become more bearish on our biggest miners' prospects.
Although it was a poor week in general for most investors, there were a few standout performances which are worth noting:
- Goodman Fielder Ltd (ASX: GFF) soared 22.7% after rejecting a $1.27 billion takeover bid, which it believes undervalues the company.
- Transfield Services Limited (ASX: TSE) climbed 18% after confirming it is currently engaged in refinancing activities.
- Cash Converters international Ltd (ASX: CCV) jumped 7.5% after providing a strong performance update for its third quarter of operations.
- Treasury Wine Estates Limited (ASX: TWE) rose 6.2% after ending speculation it had been approached by Pernod Ricard regarding its US assets.
- Collection House Limited (ASX: CLH) increased 5.6% after reconfirming its NPAT guidance for FY14.
There were also a handful of companies which plummeted much further than the market itself:
- Acrux Limited (ASX: ACR) plunged 40.5% after warning it may not receive a $50 million milestone payment.
- BC Iron Limited (ASX: BCI) dropped 12.2% based on concerns regarding the iron ore price.
- Fortescue Metals Group Limited (ASX: FMG), the nation's third largest iron ore miner, also fell 8.1%.
- Senex Energy Ltd (ASX: SXY) lost 15% after it failed to find gas at Sprigg-1 Well in South Australia.
- St Barbara Limited (ASX: SBM) deteriorated 15.6% as the spot gold price fell.
Foolish takeaway
Do yourself a favour and don't get caught up in the "strategy" of selling in May. Historically, it might not be the market's best month but it is important to focus on the long-term.
