Sell In May and Go Away?

Posted by Jill Boynton on May 12, 2015

There is an old saying in the stock market, “Sell in May and go away”. This adage implies that the markets underperform during the summer and you will have better long-term returns if you stay out of the stock market. There is some merit to the saying, according to the website Seeking Alpha (www.seekingalpha.com). The stock market has declined from May to October in many years. But when they dig into the data further they find the stock market usually performs well in certain years (mid-decade and pre-election years) and also rises about half the time in the other years. Thus you have about as good a chance of catching a market wave as you do of avoiding a decline. It’s not worth the gamble. Instead, consider buying into the markets if they do happen to go down and reap your reward down the road. Trying to time the markets is a fool’s game.

« Go back