May has has historically been an "up" month for Wall Street, rising in 13 consecutive years since 1984. In the last 12 years, the month beat all other months, gaining a spectacular 37.4 percent.
The Kiplinger Washington Letter says signs point to a stock market near its peak -- slower economy, smaller earnings gains, historic high price-earnings ratios. It adds that even many long-term optimists believe that the market is overpriced and that it's not the time to invest fresh money.
"But stocks will end the year a little higher than they are now, driven by the billions that will keep flooding in from 401(k)s and IRAs," it says. "Inclination is to keep feeding the bull, even when it doesn't make sense."
RANDOM THOUGHTS: "REITS may be coming back into favor with investors who often flee REITS in uncertain market times. We are also seeing increasing insider accumulation." (Investment Digest.)
"Treasury bonds are in good shape for resuming the upward trend. Slowing of the worldwide economy is being signaled by weakened demand for commodities, and this will weaken demand for borrowing money, driving down rates." (McClellan Market Report.)
"Uncertainty is the friend of the long-term successful investor. You sell when the market is euphoric and buy when it's depressed." (Smart Money, May.)
Pub Date: 5/01/98