T. Rowe Price's Vohora: Separating globalisation and localisation

Recent events have seen a shift

May was a volatile month for investors. The Fed hiked rates 50 bp for the first time in 22 years; the US experienced the largest quarterly drop in non-farm productivity since 1947; the longest losing streak for the S&P 500 (down for seven consecutive weeks) since 2001 finally concluded; and to top it off UK inflation hit 9% – the worst level since 1982.

So, with what feels like an endless stream of negative news flow from all corners of the world so far in 2022, is there validity to the old adage 'sell in May and go away'? Keep calm and stay invested The 'sell in May' saying is based on the theory, if you could call it that, historical underperformance during the six-month period from May to October is best avoided by selling holdings and hoarding cash. While there may be some empirical truth that the period has been particularly volatile in some years, the key flaw to this as a strategy is that it relies on investment timing - buying...