"Is 'Sell in May and Go Away' Really a Good Investment Strategy? Find Out Here!"

“Sell in May and go away” is a strategy that suggests investors can sit out six months of the year and still perform well. The idea originated in the 1700s in London, where wealthy investors left for the summer, causing market activity to dry up and prices to slump.

Historical data since 1950 shows that the S&P 500 has consistently outperformed in the November to April period compared to May to October. The S&P 500 returned 6.5% on average in the former period and just 1.6% in the latter from 1970 to 2023. The Dow and Nasdaq show even greater differentials.

While the “sell in May” strategy has some merit, staying fully invested for the entire year provides even better results. From 1975 to 2024, $1,000 invested would have grown to $64,053 under the strategy, but $340,910 if fully invested. Market timing, even with seasonal merit, is generally detrimental.

Market timing, even with seasonal merit, is generally detrimental. After the pandemic selloff in 2020, markets soared higher, showing that any type of market timing, even with seasonal merit, can be detrimental to long-term portfolio health. Ignore the “sell in May” strategy, and stay fully invested for better results.

Read more at Yahoo Finance: Is ‘Sell in May and Go Away’ Really a Good Investment Strategy?