Sit tight on your stocks and ride out the summer

SELL in May and go away, buy again on St Leger's Day. The age-old advice for investors to gallop out of the stock market for the summer and not return until 11 September does not find any favour with experts this year, writes Sue Fieldman.

You are better to ride out the summer and sit tight over any temporary blips. The alternatives could be a far less interesting prospect.

Elissa Bayer, associate director of the stockbrokers Gerrard Vivian Gray, thinks that the summer will see a period of consolidation in the stock market with perhaps a further rise at the end of the year. But she certainly does not advocate investors coming out of the market in the meantime.

Fred Carr, chief executive of WI Carr Investments, agrees that punting in and out of the market is not a good bet for the private investor.

He says: 'You have got to get two decisions right, when to buy and when to sell, and there is capital gains tax to consider. Furthermore, the market is looking good value in the medium term'.

The other problem is if you do come out of the market, where will you put your money? When interest rates were high, the building societies were an obvious choice. Now they are an uninteresting alternative.

Mary Blair, product development manager at the fund managers Fidelity, can see no reason to forsake the stock market for the building societies this year. She says that all the signs for the stock market are looking good and that now is the wrong time to get out.

The only whiff of disquiet is from Mr Carr. He warns: 'Investors might want to think again if they are seriously worried about an earthquake in Japan.'

Aside of an earthquake shaking the market, the experts are all unanimous that the green shoots of recovery are sprouting and that equity investors should stay in to reap the fruits of their investment.

However, you should remember that talking up the market is a favourite occupation of those involved in it.