There is an adage on Wall Street that goes, "Sell in May and Go Away," because of the historic tendency for poor returns from April 30 through October 31 over the decades. The evidence is quite compelling.
I'd add a new one this year: "Hit the Beach This August." With the share prices of many leading companies 15-20% higher over the past two months, I suggest raising cash and taking a break from the markets. It's a fine time to unplug for a couple of weeks (at least) and not think about markets.
I think there is too much complacency about expected support for stock prices by central bankers in the U.S. and Europe.
I am willing to miss further gains in stock prices over the next couple of months. I do not agree with the many market strategists who assert that equity valuations are quite reasonable at current levels. With p/e ratios of many leading companies in the high teens on current-year earnings while profit margins are at record levels, I disagree.
The only way to argue that equities are undervalued here is to compare equity dividend yields (or worse: the "earnings yield" or the inverse of the p/e ratio) to the record-low yields on U.S. Government securities. I've heard the argument that there is no alternative to investing in equities before. I didn't think that was a sound case then, and I don't think it's sound now. Wait for better buying opportunities.
S & P 500: 1375