Summer is the most popular time for people to take off on vacation. Unfortunately, there are a lot of little details that need to be addressed to make it a carefree journey free of summer vacation money concerns. The more you plan ahead of time, the more likely you’ll be able to enjoy yourself while gone and return home without lingering financial concerns in your wake.


It’s that time of year for a break from the routine. Figure out where you want to go, pack up and take off — oh, if only it were that simple. Instead, today’s adult generation has to do a lot of planning to pull off a successful vacation. For example, who’s going to take care of the pets? Who will be there if mom has a fall? Should we leave our valuables in a safety deposit box? Are we going to a country where we need additional vaccinations?

The list goes on and on. And then there are the money issues. Are there any changes you should make to your financial strategies before extended vacations, or just leave them be while you’re gone? Do you have room on your credit card for vacation charges, and will you get hit with excessive fees when traveling abroad? Have you thought about getting some of the local currency before you leave home? You know, to pay for taxis and tip luggage handlers.

People often say they had to come home to take a break from all the exhausting activities of a vacation. But when you consider all the things you need to do in preparation to leave town, a vacation may be just what you need — so long as you think of everything in advance.


There’s an adage when it comes to investments that says, “sell in May and go away.” That’s because the market tends to take a break from high levels of performance during summer months. Since 1950 the Dow Jones Industrial Average has averaged only a 0.3 percent return during the May-to-October period. The rest of the year features an average gain of 7.5 percent, so it’s as if the market takes a summer break as well.

Furthermore, there tends to be less trading activity during the summer months, presumably because more high-volume traders take time off when their kids are out of school. (1)

However, selling before the summer months and ramping back up in the fall has a few potential downsides. First of all, it can lead to unnecessary transaction fees and capital gains taxes. Second, the particular stocks you decide to cash out may actually experience an upturn, which reiterates all the reasons why we don’t consider market timing to be a good long-term strategy.

With that said, if you’re thinking of moving some assets around, you might consider stocks that tend to experience an uptick during the summer. For example, airlines, sports apparel, real estate and theme parks like Disney tend to perform well. Then there are other, less obvious industries such as technology and biotechnology that have historically posted strong returns during the summer. (2)

Some investment analysts have recommended investors buy instead of sell ahead of summer this year. That’s because optimism for Donald Trump’s pro-growth policies is already priced into the market, but the recent political turmoil has many investors taking profits and moving into under performing securities with better prospects for growth. Other wealth managers, however, advise it may be better to stay the course than drop out for the next six months. (3)

Playing a Waiting Game

If we go the entire year and Washington does nothing, no tax reform, no repatriation, I think there will be a little disappointment. Ironically enough, the disappointment will be in November or December because people will realize they went the whole year and got nothing done. (4)

Chris Zaccarelli
Chief Investment Officer, Cornerstone Financial Partners

Credit Cards

Some credit card companies encourage you to inform them ahead of time if you’re leaving the country. That’s because many have systems in place to trigger a fraud alert if you make atypical large charges, especially from outside the country. If you have one of the new credit cards with a chip (meaning it is EMV-enabled, which stands for Europay, MasterCard and Visa), the card is encrypted and deemed safe for use anywhere. The United States was the last major market to convert to the chip system, so if you travel abroad using a magnetic-stripe card you may find some foreign merchants unable to accept it, particularly at self-service payment kiosks. (5)

It’s also a good idea to use a credit card that doesn’t charge a foreign transaction fee to convert the local currency to U.S. dollars. Some merchants will ask if you want them to convert that fee at the point of purchase in order to help you determine how much you’re paying in U.S. dollars. This is called a Dynamic Currency Conversion, or DCC fee. It’s usually a good idea to turn down this service, as the fee is typically more than what credit cards charge. But again, if you use a card with no foreign transaction fees and decline the DCC service, you won’t have to pay a currency conversion fee. Keep in mind, however, that you will have to pay whatever the charge converts to in U.S. dollars when you get the credit card bill. (6)


If you’re traveling abroad, check with your bank to see about exchanging for foreign currency before you leave. You should do this at least a couple of weeks in advance, as bank branches don’t tend to keep quantities of every foreign currency in the building. Some enable you to order the currency from their website and ship it directly to your home. This avoids having to pay a high service fee at foreign banks and allows you to arrive with some local cash in your pocket.

If you need more cash while abroad, pay attention to the conversion fees charged. They are usually less at banks than, say, an airport kiosk or other currency exchange merchants. You may be able to get even lower rates if your bank has branches or a partnership with a financial institution in the country you’re visiting. Avoid foreign bank ATMs because you’ll likely pay a high service fee in addition to the currency conversion fee. (7)

If you’re going to be gone for a substantial amount of time, consider setting up automatic payments for recurring bills, such as your mortgage, car payment, utilities and credit cards. That way you don’t have to worry about missing the due date of a bill that comes in the mail.

Final Thoughts

When it comes to investing, it’s all about goals. Unless your investment is somehow aligned with your vacation plans, it may not be prudent to make changes for the time that you’re away. We believe your efforts are best spent developing an asset allocation strategy designed to meet a specific financial objective within a certain time frame. Sticking to that strategy year round with periodic rebalancing can be a sound way to help you work toward your goals without spending your vacation watching daily stock market performance on your cellphone.

Enjoy your vacation. It’s one of the things we work, save and invest for all year long.

1 Investopedia. 2017. “Sell In May And Go Away.” Accessed May 29, 2017.
2 Tim Lemke. June 2, 2016. “7 Investments That Usually Soar During the Summer.” Accessed May 29, 2017.
3 NASDAQ. May 29, 2017. “Wall St Weekahead: Switch it up this year: Buy in May, till November stay.” Accessed May 29, 2017.
4 Ibid.
5 Sienna Kossman. March 22, 2017. “8 FAQs about EMV credit cards.” Accessed May 29, 2017.
6 Erin El Issa. Dec. 22, 2016. “Foreign Transaction vs. Currency Conversion Fees: What’s the Difference?” Accessed May 29, 2017.
7 Melissa Lamberena. Feb. 9, 2017. “Where to Exchange Currency Without Paying Huge Fees.” Accessed May 29, 2017.
The advisory firm providing you this report is an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives. Investment advisory services offered through AE Wealth Management, LLC.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by AE Wealth Management. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy a security or insurance product.


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