Recent data challenges the traditional “Sell in May and go away” market adage, with evidence suggesting investors might be better off delaying portfolio adjustments.
What Happened: Ryan Detrick, Chief Market Strategist at Carson Group LLC, highlighted on Thursday that May has delivered positive returns in 9 of the past 10 years for the S&P 500 Index, tracked by SPDR S&P 500 SPY.
“Before you Sell in May, just remember this month has been higher 9 of the past 10 years,” Detrick wrote on X, suggesting the traditional investment wisdom may need updating.
The data shows the S&P 500 averaged 0.9% returns in May over the past decade, with a median return of 1.1%. Only 2019 bucked this trend with a significant 6.6% decline, while 2024 saw the strongest May performance at 4.8%.
Why It Matters: LPL Financial‘s chief equity strategist, Jeff Buchbinder, notes that even when April ends negatively, as expected this year, “the outlook isn’t quite as grim” based on historical patterns.
The conventional “Sell in May” strategy held more weight between 1962 and 2012, when May-July periods averaged negative 0.3% returns. However, post-election years like 2025 have historically favored bulls, with 18 of 24 such periods delivering positive returns averaging 3.8%.
Callum Thomas of Top Down Charts adds nuance, noting the seasonal weakness primarily manifests during bear markets, while bull markets still see positive returns during summer months, though typically with increased volatility.
Photo Courtesy: smshoot on Shutterstock.com
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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