Sell in May S&P 500





.
.

Sell in May and walk away.

This adage is based on the observation that the best six months for the stock market has historically been November through April.

So how significant is the variance in performance between the best six and worst six calendar months?

Very.

The following chart illustrates the performance of the S&P 500 during the calendar months of November through April (orange line) and the performance of the S&P 500 during the calendar months of May through October (blue line).

The difference in performance is noteworthy.

With significant headwinds (e.g., inflation, rising interest rates, war, etc.), there is now a counter — seasonality.

.
.
.
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.