“Sell in May and go away” is a well-known financial-world adage. It is based on the historical underperformance of some stocks in the “summery” six-month period commencing in May and ending in October, compared to the “wintery” six-month period from November to April. If an investor follows this strategy, they would divest their equity holdings in May (or at least, the late spring) and invest again in November (or the mid-autumn).
“Sell in May and Go Away”
Some investors find this strategy more rewarding than staying in the equity markets throughout the year. They subscribe to the belief that, as warm weather sets in, low volumes and the lack of market participants (presumably on vacations) can make for a somewhat riskier, or at a minimum lackluster, market period.
| Monday | Tuesday | Wednesday | Thursday | Friday |
|---|---|---|---|---|
| Bullish | — | Bearish | — | — |
| First trading day in May: S&P up the last 17/24 | FOMC Meeting Start | FOMC Meeting End | — | Friday before Mother’s day: Dow Jones up the last 19/27 |