Hello, and welcome to the Life By Design podcast, brought to you by Strategic. This podcast is all about helping you live your great life.

Each episode will feature insights from our Chief Investment Officer, Doug Walters. Hello, and welcome back to the Life By Design podcast.

I'm here again with Doug Walters. Hello, Doug.

Jay, how are you? Very good.

And so today, we are going to continue with kind of our conversation around, uh, different topics in the markets and the finance world, and we're gonna start with our weekly recap, and then we're gonna get into, uh, superstitions today. Sounds great.

Yeah, this is gonna be great. Yeah.

So, uh, yeah. So, uh, so Doug, just kind of, uh, some of the headlines from the week, and, and, and what we're looking forward to.

Right. As we previewed in Insights, our written Insights, it's pretty quiet week.

We've got a few stragglers of earnings reports from companies, and I think all eyes are really on what they're saying about tariffs, and there it was a mixed bag. You had Walmart unsurprisingly saying that we should expect to see some price increases.

Home Depot, maybe surprisingly, said, "Don't expect any near-term price increases." So a little bit of a mixed bag on the tariff front, um, but I think we'll There's more to come on that in, in the coming months, so keep our eye on that. And that's just mostly due, uh, to how the business is run and, and each business kind of runs a little bit differently, and, like, how ahead of production or purchasing they are and what they see coming down, and some are waiting and seeing, and some are like, "Well, we'll adjust now." So it's, it's an odd time for that, right?

Right. Yeah, I would imagine it's You know, their supply chains are, are different, their time to market are different in terms of their, their product lines and where their products are coming from might be slightly different as well.

So, uh, but ultimately, I think the, you know, the real impact of tariffs, we won't know for a couple of months- Mm-hmm. when the supply chain impact will really start to be felt.

Yeah, and kind of with the back and forth on the tariffs, when, where we settle, what numbers are settled on, right, will then, will then indicate too how that affects Right. Right.

Yeah. Yeah.

And s- you know, some of the effect could be transient if we get, you know, a, a reversal of some of these tariffs, but some are already in the pipeline- and I suspect we'll be seeing them in the coming months. Uh, anything coming up that, uh, you are looking towards?

Well, we're keeping an eye on the budget discussions. I think that's They're, they're in the early stages.

Mm-hmm. Uh, but that does have a meaningful impact, especially on treasuries, when you're thinking about the debt that the company, uh, that the country- Mm-hmm.

is taking on. So we'll be watching, uh, those headlines as they evolve, and beyond that, there's not too much going on.

It's getting- Yeah. to feel like, you know, we're entering into the quiet summer months.

Okay. Well, and as always, if, uh, something does come up, Doug has his weekly written Insights on our website, and you can check those out.

They come out every Saturday, uh, after the week is over. Nice.

So Um, okay. So, so now to our main topic, uh, for this episode, is, uh, talking about superstitions, uh, though they affect our everyday life, this one specifically we're talking about markets and, and the financial sector.

Right. Exactly.

Yeah. So it's always You know, this is a little bit of a lighter topic, but it does have real impact on the way some people think about investing, specifically talking about sell in May and go away.

Uh, and there's a bit of history that if you want to get into the, the history. I do.

All right. He wasn't expecting that.

Yes, please. Yes.

So, yeah, where does that Like, how did that ar- I don't know if you know, but how did that originate and where did it come from? Well, it is believed to have originated from the UK.

Mm-hmm. There was a saying, "Sell in May and go away.

Come back again on Ledger's Day." Ledger's, St. Ledger's, St.

Ledger's Day. St.

Ledger's is a big, um, horse race. Okay.

And this dates back to a time, we're talking 1700s, 1800s, when traders literally did go away for the summer. Oh, okay.

But- We didn't have the sort of daily liquidity that we expect today in, in the markets. Traders would literally go away, and so liquidity would dry up, and generally it was not a good time to be executing investment trades.

So, so that's That is where that saying is believed to come from, and this Ledger's, St. Ledger's Day stakes was sometime in, uh, I think mid-September or something.

Okay. The idea was traders are gone, you know, for the summer.

They'll come back for the races, and then you can start investing again. It's You know, it's wild to me how many things we do today that are based on things from hundreds of years ago.

Yeah. And it's just like, "Okay, well the world's changed a little bit, so" Right.

Yeah. Yeah.

And it's And, you know, so why, you know, why even talk about it today? Yeah.

Well, at some point in the past, somebody, you know, looked into this and said, "You know what?" You know, markets do tend to underperform during this period from May through October. So now, we kind of, you know, we've extended beyond Saint- Mm-hmm.

Ledger's Day and we've gone, uh, included October, a little bit of data mining, uh, apparently. Uh, but this idea that, you know, the market tends to underperform is ba- someone just looked and said, "Geez, it does tend to underperform during-" Hmm.

" those times." Yeah. Which is interesting.

I think, you know, and, if anyone works in an office or at a, at a company, uh, May through September, October is when most people take their vacations, right? Or kids, got kids things going on.

Or I wonder if there's something that whole summer vacation thing is up for us. Right.

Especially for us in the northern atmosphere, right? Yeah.

Yeah. I think, you know, historically and even, you know, as we get closer in time, not, you know, not to 1700s and 1800s, it probably was a period of less, you know, liquid markets during the summer.

But that certainly isn't the case today. Yeah.

And if you do look at the data, and, you know, a year ago, we did take the time to look at this data, it really actually is driven by just a couple of time periods. So the dot-com crash, that- Hmm.

the bust there happened, like, the worst of it did happen in that stretch. Okay.

Yeah. And we had the financial crisis in 2008.

The worst of that happened during that stretch. Right.

If you take those data points out, then actually it- isn't quite as significant. So I think this idea that, you know, there's some economic or systematic reason why we should be- Yeah.

underperforming during this time is certainly a thing of a past, if it was ever anything. So it's more, it's like a, um, what is the, uh, data bias?

Where you're, like, looking for the data that proves the point versus, like, taking the whole of the data in? Right.

Yeah. Yeah.

And I think as, as humors- uh, as humors, as- as humans, we are pattern seekers, right? It is part of our DNA.

It's what- Yep. has helped us be successful as, as a species sur- surviving, finding patterns in the world we live in, it's finding things that are repeatable.

But it does, it can cause us to look for patterns where they really don't exist. Yeah.

Or if they exist, there really isn't causation there. And it's not the only one, right?

We have a lot in the markets for almost every season, it seems. Yes, yes.

We have a saying for every season. We have the Santa Claus rally, we have the January effect.

We even, one of my favorites is the, um, the Super Bowl effect. Oh, I like that.

Yeah. And this is like, this is a perfect example of data mining because obviously there's, you know, I don't think anyone ever took this one seriously.

Right. There's no, there's no economic link there.

But if you looked at the data, and this was, you know, maybe decade or 2 back, there was really good correlation, you know. Yeah.

Uh, but again, pure, pure data mining, but people like to, uh, to, to bring it up and have some fun with it. Yeah.

Exactly. And that, you know, the research is really important- Mm-hmm.

because data alone can easily be mined. You can look at historical data, look at any given time period and say, "Oh, there's a pattern here this, you know, this month," or, "This week of the year is always the strongest week of the year." That's just pure data mining.

You really wants to do research, understand the economics behind the effect, make sure that it's a real effect and not just data mining. As, uh, as something that happens sometimes in life, somet- when your lights go out, it's generally not a ghost.

It's probably that a light bulb blew. Right.

And you just need to change the light bulb. Exactly.

All right. Well, uh, I really, I really liked that.

And so we're gonna focus on science, we're gonna focus on evidence, and that's how we're gonna make our decisions. Yes.

Yes, that is, we will stick to that. Um- No, n- no sayings, no superstitions, we'll stick to the science.

Well, you hear- heard it here, folks. We don't believe in ghosts.

Right. All right, Doug.

Well, thank you so much. All right.

Thanks, Jay. Take care.

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