Dow Average Sell in May vs 2022





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So how has the stock market performed during the current sell in May period?

The following chart illustrates the average performance of the Dow during the calendar months of May through October (orange line) as well as May 2022 to present (blue line).

The general pattern of the Dow during the sell in May timeframe is choppy for the first two months (i.e. May and June), followed by a rally.

This year’s Dow has followed a similar pattern (albeit in a more volatile fashion).

Looking forward, if the Dow was to continue to follow a pattern that is similar to the average, the market would trade in a flat/choppy fashion (except for the second half of September) for the next three months.

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Dow Average Sell in May

How much would an investor have gained investing during the months of November through April?

For the calendar months of November through April since 1950, $1 would have grown to $92 (not accounting for dividends, commissions, inflation, or taxes).

How much would an investor have gained investing during the months of May through October?

For the calendar months of May through October since 1950, $1 would have grown to $2.62 (not accounting for dividends, commissions, inflation, or taxes).

What is the justification for sell in May?

One theory has it that as the weather improves, investors focus a little less on the stock market and a little more on the great outdoors.

What is meant by the stock market adage, 'Sell in May and walk away'?

Sell in May is based on the stock market’s tendency to underperform for the six calendar months of May through October and outperform from November through April.