Wealth manager Paul Denley, CEO of London-based Oakham Wealth Management, has explained the key differences in how wealthy investors approach their money during the summer months compared to average investors. While many people panic over volatile summer markets, seasoned investors take a more patient approach.
Summer Markets Are Deceptive
According to Denley, summer markets can be misleading because many professional investors are on holiday, meaning fewer trades can cause larger price swings. “Summer markets can be deceptive. With many professional investors away on holiday, it takes less buying or selling to move prices around. That means markets can look much more dramatic than they really are,” he said.
The old adage “Sell in May and go away, come back on St Leger Day” captures the seasonal trend, but Denley warns against taking it literally. Research shows that shares historically produce stronger returns between November and April than between May and October, but that does not mean investors should sell everything every summer.
Focus on Quality, Not Noise
Instead, wealthy investors distinguish between market noise and genuine opportunities. “They don't let scary headlines force them into making emotional decisions. They focus on the quality of the companies they own, not what the market happens to be doing on a Tuesday afternoon in August,” Denley explained.
A common mistake among regular investors is assuming every sharp market movement signals a fundamental change. “In reality, summer price swings often happen because fewer people are trading. Prices can move more sharply, but that doesn't necessarily tell you anything about how healthy those businesses really are,” he added.
Stick to the Plan
As summer ends and investors return, markets tend to be driven more by corporate earnings and economic data. Denley emphasised that successful investors rarely restructure their portfolios during the summer months. “Successful investing isn't about reacting to every headline. It's about sticking to a well-thought-out plan and remembering that short-term market swings are often just noise. The wealthy don't try to outsmart the calendar. They know patience usually beats panic. If nothing has changed about the businesses you own, a volatile summer isn't usually a reason to change your investment strategy,” he concluded.
