Lessons learnt at your grandmother's knee can be hard to apply. “Sell in May and go away” sounds easy enough, but when in May? Anyone waiting for the end of the month has been caught up in the wave of panic flooding across markets which saw the Dow Jones Industrial Average fall below 10,000 yesterday.
Those who sold at the start of the month may be smug but where should they, and the many now selling, park their money? The supposed safety of hedge funds may appeal. They, after all, are meant to make money whatever the weather.
Sure enough, hedge funds have seen big cash inflows recently but they are not proving as safe as investors might have hoped. Excluding Lehman's collapse, hedge funds have been having their worst month in a decade. The sector's opaqueness makes it difficult to be sure but the daily HFRX index shows them down