Why “Sell in May and Go Away” Often Misses the Bigger Picture
Every spring, the phrase “Sell in May and go away” starts making the rounds again. The idea is simple: investors should exit the stock market during the summer months and wait until the fall to reinvest.
Like many Wall Street sayings, it sounds clever. It also sounds reassuring during periods of uncertainty. But history suggests that building an investment strategy around a calendar slogan can create more problems than it solves. The market does not operate on a seasonal schedule. The phrase originally came from a historical pattern where market returns between November and April tended to be stronger than returns between May and October. While there have certainly been periods where this trend appeared true, the bigger issue is what investors miss by trying to time those moves.
Some of the market’s strongest gains have happened during periods investors least expected. Missing just a handful of strong market days can have a significant impact on long-term returns. Unfortunately, those strong days often happen close to periods of volatility or uncertainty, exactly when many investors are sitting on the sidelines waiting for “better conditions.”
One challenge with seasonal investing strategies is that they assume timing can consistently be executed correctly twice:
first when selling, and then again when deciding when to get back in. That is much harder than it sounds. Markets are forward-looking. By the time economic data improves or headlines feel comfortable again, stock prices have often already moved higher. We saw this during the Global Financial Crisis in 2009, during the COVID recovery in 2020, and during many other market recoveries throughout history. The market typically bottoms before confidence returns.
Even looking at recent history, markets have frequently delivered positive summer returns despite widespread skepticism. Investors who exited simply because the calendar turned to May would have missed meaningful opportunities. This does not mean markets move straight up, nor does it mean volatility disappears during the summer months. Short-term pullbacks are normal and healthy. But long-term investing has historically rewarded discipline more than prediction.
The better question is usually not:
“Should I sell because it’s May?”
Instead, it may be:
“Does my portfolio still align with my long-term goals, risk tolerance, and financial plan?”
That shift in thinking changes the conversation from speculation to strategy.
For long-term investors, successful investing is often less about reacting to seasonal narratives and more about maintaining a disciplined approach through changing market environments. Headlines, market fears, elections, interest rates, and economic uncertainty will always exist in some form. The investors who tend to struggle most are often those making emotional short-term decisions based on temporary narratives.
“Sell in May and go away” makes for a catchy headline. But history suggests that patience, diversification, and staying invested have generally been more reliable strategies than trying to outguess the calendar.
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