The “Sell in May and Go Away” Investment Strategy: Is it Worth Considering?

The “Sell In May And Go Away” investment strategy has been a topic of discussion among investors for decades. The theory suggests that investors should sell their stocks in late April or early May, sit on the cash during the spring and summer months, and then buy back into the stock market in the fall.

While this strategy may sound simple and appealing, it has its drawbacks. One major issue is that when many investors follow the same strategy, the impact on individual investors is diluted. Additionally, the strategy does not take into account individual financial situations and investment goals.

Historical data from LPL Financial shows that the S&P 500 Index has had an average positive return of 3.8% during the May-October period over the past decade. However, the returns can vary significantly from year to year, with the index being up 10.1% in 2021 but down 6.3% in 2022 during the same period.

Ultimately, the key to successful investing lies in having a well-thought-out plan and sticking to it. Whether you prefer investing in individual stocks, index funds, or other assets, it’s important to have a strategy that aligns with your long-term financial goals. Following the herd or trying to time the market based on catchy phrases like “Sell In May And Go Away” may not be the best approach for building wealth over time.