Buy in May and Go Away

The rhyming market maxim “Sell in May and Go Away” describes the phenomenon that stocks have historically underperformed between May and October, and that investors are better off being out of the stock market and in bonds or cash during the summer months, only to return to risk-seeking assets for the more robust November through April period. Historic advantages, however, lack year-over-year persistence and ignore key realities like taxes and re-entry discipline. There are no fundamental drivers that support “selling in May” every year.