How to 'Summer-ize' Your Portfolio, Budget, & Life

May 23, 2024
Summer markets can pose unique twists but also opportunities. Here are some investor need-to-knows before you head off for vacation.

Summer is just around the corner, and getting ready requires more than stocking up on sunscreen.

Before investors head off to the beach, lake house, or some foreign land, they'd be wise to brush up on seasonal market patterns, check their portfolio positions, and familiarize themselves with market trends, not just in stocks but in commodities like crude oil and livestock. Summer also straddles the midpoint of the calendar year, a lower-pressure "halftime" of sorts offering a good opportunity to check your portfolio's performance and see how much progress you're making toward your goals.

"Summer is a great time to re-evaluate your asset allocation to ensure it's consistent with your risk profile and the financial goals you aim to achieve," said Peter McIsaac, director at Schwab Center for Financial Research. 

Here's a few items for your summer prep checklist.

Think twice before you "sell in May and go away"

This old adage refers to unloading winning stocks in the middle of spring and stepping back from the market for the next three or four months. Summertime has been a historically weak period for stocks, with the S&P 500® index (SPX) typically underperforming from May through October compared to November to April over the early 80 years since World War II ended, according to data from CFRA Research. 

More recently, it's been more of a mixed picture, where selling in May for some may have turned out to be the wrong move. From 2018–20, the S&P 500 advanced an average of almost 7% from the end of May through October. In 2023, the S&P 500 gained almost 10% from the end of May through July but then retreated 8.6% by November 1.

"While summertime may pose unique risks, timing the market is extremely difficult, if not impossible, meaning it probably makes more sense to stay the course as opposed to making any rash decisions," McIsaac said.

What to watch: Volatility. This year, there are a myriad of geopolitical and economic factors at play that could add some twists and turns to this summer's markets. These include escalating conflict in the Middle East, shifting expectations for Federal Reserve interest rate policy, and the lead-up to the U.S. election in November.

Volatility based on the Cboe Volatility Index® (VIX) was relatively calm during the first three months of 2024 but soared to six-month highs above 21 in April after Israel and Iran exchanged missile attacks. As of mid-May, the VIX was still historically low at roughly 12 to 13 but watch out for any upswings further into the 20s or near 30. In March 2023, for example, the VIX briefly topped 30 as a regional banking crisis roiled the market.

Prime time at the pump

WTI Crude Oil (/CL) futures rallied to six-month highs near $88 per barrel in early April before tumbling under $80 by mid-May. Oil prices remain about 10% above year-ago levels just ahead of summer driving season. That likely means motorists face elevated costs when filling up their tanks.

Regular-grade gasoline at the pump around mid-May averaged about $3.61 per gallon nationwide, up about 2% from a year earlier, according to AAA. The Energy Information Administration (EIA) forecast the average pump of gasoline to remain at $3.68 from April through November, up slightly from last year, though the EIA warned that high refining costs could boost summer prices. 

Crude oil may have peaked for now, however. Oil prices are expected to drop even further later this year, perhaps as much as $2 to $3 from current levels based on CME futures. That may be good news for motorists but could also put the brakes on one of the market's major upside drivers if energy shares follow the oil market lower.

What to watch: Independent refiner stocks. Energy companies have still posted strong returns this year even after taking a haircut due to the crude oil market's downturn. The S&P 500 Energy ($SP500#10) gained almost 12% through mid-May, trailing only communications services among S&P 500 sectors. 

This year's energy sector rally hasn't been driven by the "usual suspects." Shares of so-called oil and gas majors like ExxonMobil (XOM) and Chevron (CVX) have done fine. But it's the more under-the-radar "independent" refiners, who process crude oil into gasoline and diesel but don't drill for oil, that have outpaced most peers. 

Two independents, Marathon Petroleum (MPC) and Valero Energy (VLO), are up about 17% and 20%, respectively, even after dropping sharply from April peaks. This indicates the market sees greater potential returns in companies that can profitably sell fuel at the pump but aren't exposed to the risks and vagaries of global oil and gas exploration. 

Slight altitude adjustment for air travel fares

Airfares may ease from last year's levels but still remain historically high, with airlines reporting robust demand for both business and leisure travel. United Airlines (UAL) is among the major carriers expecting a strong summer. In a May 14 announcement, the company forecast its busiest-ever Memorial Day holiday weekend, with about three million travelers expected to fly during that time period.

U.S. airlines will carry a record 271 million passengers around the globe from June through August, up 6.3% from last summer, according to Airlines for America. Despite more people taking to the skies than ever, the average ticket price for domestic travel is expected to drop to $305 this summer, down 6% from summer 2023 but still up more than 8% from prepandemic levels, according to online travel agent Hopper. 

What to watch: Airline stocks. As a group, major U.S. carriers have turned in a mixed performance so far in 2024. United Airlines and Delta (DAL), which hit a four-year high in early May, are the top two airline shares in the Dow Jones Transportation Average ($DJT), both up more than 32% through mid-May. Southwest Airlines (LUV), by contrast, is down around 3%.

High steaks game: Grillers, get ready to buck up again for beef

Tight animal supplies resulting from multi-year herd contraction are expected to keep cattle prices historically high all year, which means that with summer grilling season ahead, beef lovers should be prepared to pay up at the supermarket meat counter. Live Cattle (/LE) futures, which reflect prices for slaughter-ready animals, are down from a record above $1.90 per pound in March but still up 10% from year-ago levels. High animal costs end up at your local grocer. 

Extra lean ground beef averaged $6.81 per pound in April, up 3.5% from the same month in 2023, according to the Agriculture Department. Prices likely will continue climbing as grilling demand accelerates. Ground beef averaged $6.83 last summer, up almost 5% from summer 2022.

What to watch: Meat processor stocks like Tyson Foods (TSN), the largest U.S. meat processor. Tyson shares have gained about 34% since late October, outpacing the 27% advance for the S&P 500 index. But at just above $60 as of mid-May, Tyson is still well below a 2022 record peak above $100, and as a commodity-linked stock, the company has a checkered track record of delivering consistent returns, and high animal prices can squeeze the company's margins if it's unable to pass along greater costs. In the most recent quarter, Tyson posted a net income of $145 million but missed sales expectations, sending the stock down sharply. Tyson also warned that high commodity costs could burden results the rest of the year. 

Still, it's good to go off-grid—even with the markets

Many people need a break from work or school to recharge or catch their breath. The same concept can be applied to investing and the markets. We're more wired into the market's daily gyrations than ever, which has its upsides. But obsessively grabbing your smartphone to check your positions multiple times a day isn't conducive to your mental or physical health.

It's not a bad idea to tune out the markets for a week or so and remember the importance of maintaining focus on the longer view, according to Susan Hirshman, director of wealth management at Schwab. The markets will be there once you get back—and if you have an advisor, they'll be watching for you. Also, don't forget Schwab's trading platform thinkorswim®, where you can set portfolio alerts before you go away. These alerts can be easily adjusted on the thinkorswim platform or from the Manage Account tab on

"If you're taking a long-term investing approach, as opposed to actively trading, it's not daily market movements that matter the most," Hirshman said. "It's more about sticking to your plan and making progress toward your goals that ultimately will drive your financial success."

What to watch: Yourself and the most important people in your life. Investors prepping for time away would be wise to think about more than portfolio strategy and asset allocation. Down time can also offer opportunities to think about and discuss the largest big-picture items, such as creating a family wealth mission statement that preserves the legacy you want to leave.

"When you're 'recharging,' you may want to consider if you've fully thought out and accounted for all your life goals and what success and happiness looks like for you," Hirshman said. 

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

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