Does ‘Sell In May And Go Away’ Actually Work?

Posted by Wayne Duggan

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It’s that time of year every year where “sell in May and go away” articles and trading recommendations start popping up everywhere. But is sell in May an actual thing that traders should take seriously or is it purely entertainment at this point?

As it turns out, the answer is an unsatisfying “it’s complicated.”

LPL Financial senior market strategist Ryan Detrick recently took an updated look at the sell in May trade, which claims investors should sell stocks at the beginning of may and not buy back in until the beginning of November.

Statistically, there is some truth to the trade from a historical perspective. The six-month stretch from May through October has been statistically the worst six-month stretch for stocks since 1957. However, the S&P 500’s performance during those six months is far from bad. The index has averaged a 1.5% gain overall during that stretch and has traded higher 64.3% of the time. CLICK for complete article