Sell in May, go away...

Making stock market predictions is always fraught with danger. The best strategies tend to be buy and hold (and buy on dips). That being said, on balance I am of the belief that the next few months will be a difficult one for the US stock market and one's energy would be best served focused elsewhere. This is a moderately high conviction idea. Why?

• Valuations are rather rich. Now of course, valuations in an of themselves is never a reason to buy or sell a stock/market, but should service as a decent jumping off point. Why chase stocks that have run up by a factor of 2, ,3 4, or more at this point when they are already trading at very rich multiples?
• The Nasdaq just touched a new record high yesterday, more than doubling from its March 2020 lows. The way stocks are reacting to earnings doesn't fill me with a lot of confidence that good news will be enough to push them higher in the near term (here's looking at you TSLA and MSFT);
• Recent listings have not performed very well. My beloved COIN has been a relatively poor performer post listing (RBLX as well) SPACs have gone from red hot to ice cold, and it's harder and harder to find big day 1 pops like it was during the frothy period of late last year; and finally
• Other asset classes may take away some of the shine/focus away from stocks. The housing market is red hot and people are focused there (the WSJ has article after article about the frenzies happening around the country and how fast prices have been rising - the latest one being about Coeur D'Alene in Idaho, where prices are up 47% in a year!). The crypto market has stalled over the past month or two, digesting it' dizzying gains of late 2020/early 2021, and I am confident that it is poised to resume an upward trend shortly. 

Sometimes the best investment advice is to do nothing, rather than to search for opportunities where there are none. I am not predicting a major stock price correction from here, however I would bet that we are due for a period of consolidation, choppy trading, with little to no upward momentum. As a result, one's attention and focus would best be served by seeking a new playground to build castles. If anyone disagrees or has additional thoughts, most appreciated!