This edition of our annual screed on "Sell in May and go away" comes at an … well, we'll just say an interesting moment for the markets.

One in which investors already got a healthy helping of selling out of their systems, only to start buying with both hands again right before a period of seasonal weakness. 

So … should you sell in May and go away this year?

Well, at least, not just because some silly rhyme says you should.

The Tea

I don't know exactly why, but there's something about working 60-80 hours per week under extremely high-pressure conditions that makes Wall Streeters glom on to silly stock-market indicators and folksy phrases like pine sap on car hood:

• "In the short run the market is a voting machine. In the long run it's a weighing machine."
• "The trend is your friend, until it ends."
• "Pigs get fat, hogs get slaughtered."
• "There is always free cheese in a mousetrap."

So of course—of course!—investors love to fawn over "sell in May and go away." 

It rhymes, for Pete's sake!

Young and the Invested Tip: Forget market superstitions and folklore—make smart investments by learning through these research and analysis apps. 

"Sell in May and go away" refers to a historical phenomenon where the stock market tends to do its best work during certain times of the year. Specifically, stocks tend to be most productive between November and April, but tend to take their foot off the pedal between May and October.

If you wanted to give clearer instructions, you'd probably say something like "Sell your stocks on May 1 and go away until Nov. 1, at which point you should buy back your stocks until the following May." 

But that's just not quite as catchy, is it?

Much as I like to rib Wall Street types, though, they're not responsible for this one. The blame belongs to the Brits.

"Sell in May and go away" is actually a shortened version of "Sell in May and go away, do not return until St. Leger's Day." This phrase was slung around by British stock brokers to refer to the summer vacation stretch between May and the end of the horseracing season—which was marked by a race on St. Leger's Day in mid-September.

In other words, "Sell in May" didn't originate so much as a warning of bad returns, but as a reminder of when to grab the sunscreen … and the stock market was likely tamer without as many people on the job.

Since then, the time frame has morphed (with the phrase now including all of September and October), and the saying has picked up a nastier connotation—not without some good reason.

For one, some of the stock market's worst drops have occurred during this period. Black Monday (October 1987). The post-Lehman crash (September 2008). The Kennedy Slide (May 1962). The crash of 1929 (October). And while we got most of the losses back in minutes, the 2010 flash crash was in early May.

But even in years without the fireworks, the "Sell in May" period is simply weaker.

"The period from May to October has historically been the worst six-month return window for the S&P 500 since 1950," says Adam Turnquist, Chief Technical Strategist for LPL Financial. "In contrast, the best-performing six-month window has been from November to April. This consistent seasonal pattern, coupled with the popularity of the phrase, may have turned it into a self-fulfilling prophecy over the years."

The Take

The view from 10,000 feet looks pretty clear, then: May through October ain't great for stock returns.

But the closer you look, the more cracks become evident.

Sell in May? You'll Pay!

In the same note, LPL's Turnquist also points out that "while the May through October timeframe has historically underwhelmed with an average gain of only 1.8%, returns have been positive 65% of the time."

In other words, if you blindly sold in May and returned in November, the odds actually say you'll miss out on some gains, however modest they might be.

Young and the Invested Tip: The best way to sleep soundly through seasonal and other market shifts during retirement? Have a detailed (and flexible) retirement withdrawal strategy.

"Sell in May" Has Begun to Fray

This seasonal period might have a long-term track record of lower returns, but it's trying to rehabilitate. 

Gene Goldman, Chief investment Officer at Cetera Investment Management, points out that the 65% gain rate is actually better in recent years, with the market posting positive returns in 19 of the past 22 years.

And the shorter-term your lens, the better the S&P 500's average total return (price plus dividends):

Ait-Way Ill-Tay Une-Jay?

Ryan Detrick, Chief Market Strategist at advisory firm Carson Group and master carver of market data, brings up another issue with "Sell in May."

May, of late, has been pretty stellar.

"The month of May has been higher nine of the past 10 years, so maybe we should call it, "Sell in June and go away?" he says.

Another reason to believe May could be strong in 2025? 

"Post-election years tend to be strong, up 1.6% on average, which is the fourth-best month of the year in a post-election year," Detrick says. "Then again, April is usually strong and that clearly didn't work this year, but we are well off the lows at least."

Normalcy in Disarray After Liberation Day

I said earlier that this is an odd year for "sell in May." That's because President Donald Trump's tariff policy, including his "Liberation Day" announcement of import taxes on virtually the entire world, has already sent the markets into roller-coaster mode.

The S&P 500 peaked on Feb. 19, and a bit over a month later, it came within just a few points of official bear-market status. However, despite little in the way of actual relief from those policies and their potential fallout—Trump has offered up tariff reimbursements to automakers, but as of right now, the U.S. has failed to ink a new trade deal with any of the impacted nations—stocks have come back strong.

Detrick writes more about this in his recent blog post, but here's one particularly encouraging sign for markets:

"The S&P 500 is up six days in a row the first time this year. I looked at the past 20 years and there were only four years that didn't have a six-day win streak: 2008, 2011, 2015, and 2022. Stocks were lower all four of those years, with 2008 and 2022 being two of the worst years ever," he says. "The flipside is looking at the 16 years that had at least one six-day win streak, and stocks were higher 15 times and up more than 15% on average, with only 2018 being lower on the year. Not bad, not bad."

Detrick adds that between this and other bullish triggers, he thinks the bottom in stocks is already in—and that investors should be rewarded over the next six months, albeit with the potential for more up-and-down action in that time.

LPL's Turnquist similarly believes that a full recovery will take time and likely won't come in a straight line.

"From a technical standpoint, stocks have started to make some progress, but there is still a lot of damage to repair," he says. "Leadership trends primarily remain risk-off, most S&P 500 stocks remain in some form of a downtrend, and institutional participation in the recovery has been underwhelming. Furthermore, history shows V-shaped recoveries are outliers, as most major bottoms are a process that requires time and often a retest of the initial lows."

The most important takeaway here? "Past performance does not guarantee future results" still applies. Whatever happens between here and the end of October has virtually nothing to do with seasonality and everything to do with what is impacting the market in the here and now.

And right now, that means tariffs.

"All history stats need to be thrown out (just like technicals now)," Cetera's Goldman says. "It's all a binary bet on whether or not tariffs get reduced."

On that front, he's optimistic.

"I think the 'sell in May and go away' already happened in March/April," he says. "Expect stocks to be higher than now by year end on better valuations, U.S. advantage in trade war, Trump administration worried about impact on economy and markets, and significant cash on sideline waiting to buy in."

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Thank you for spending some time with us this week! Enjoy the warming weather, and don't forget that Mother's Day is just around the bend!

Riley & Kyle

Young and the Invested

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