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Sell in May and Go Away?
“Sell in May and go away, come back on St. Leger’s Day.”
It’s an old adage encouraging investors to sell their stocks in May and reinvest in September after the summer holiday. St. Leger’s Day refers to the St. Leger Stakes, one of three English Triple Crown horse races held in Yorkshire every September.
The saying originated in the 1700s when, historically, wealthy London traders took the summer months off, leading to lower trading volumes and subpar returns between May and September.1 It was popularized by the Stock Trader’s Almanac, which determined in its 2025 edition that someone who had invested $10,000 in the Dow Jones Industrial Average between May and October from 1950 to 2024 earned just $2,910 (without dividends), whereas someone who invested only during the other six months (November through April) earned $1,352,316.
The “Sell in May and go away” theory has evolved into the “Best Six Months” strategy that essentially claims the “winter” months produce higher returns than the “summer” months. It encourages investors to only invest from November through April. But how accurate has this pattern been?
The “sell in May and go away” pattern does not happen every year, is not true for every index, and tends not to hold true in the U.S.1 However, there is some historical truth to the saying. From 1970 to 2023, the S&P 500 returned 6.5% on average in the November to April period versus just 1.6% in the May to October period. That difference was even greater for the Dow and the Nasdaq.1
Even though the summer months historically underperformed the November through April period, that’s not the full story. Any growth in the off months would have meant an investor sold shares at a lower price than they would have bought them back for when they returned to the market for winter investing. The greatest fault of the “Sell in May and go away” theory is that it encourages investors to time the market.
Any method for timing the market, even one with historical merit, is generally harmful for long-term growth. From 1975 to 2024, $1,000 would have grown 6,305% if relegated to the Sell in May strategy. However, staying fully invested from 1975 to 2024 would have grown $1,000 by 33,991%.1 The best way to outperform either period would have been to stay invested through both.
That’s not to say the markets don’t experience seasonal shifts. There are a number of seasonal patterns that, while not occurring every year, do tend to happen on average.
Examples of Seasonal Stock Market Trends:2
- January Effect: Small-cap stocks tend to outperform in January.
- February Slump: Stocks broadly tend to lull in February.
- October Effect: Stocks can be more volatile in October.
- Santa Claus Rally: The holidays have historically produced positive returns on the last five trading days of December plus the first two trading days of January, which has been used to predict the year’s returns.
- Turn-of-the-Month Effect: Stocks tend to tick up around the turn of the month.
- Back-to-school Effect: Retail stocks tend to increase in value around the end of summer shopping season.
It is important to note that every year is different and history cannot predict the future. Plus, seasonal trends are often swamped by other macro market conditions.
Instead of trying to time the market with any strategy, even the one that says, “Sell in May and go away, come back on St. Leger’s Day,” consider investing in a strategy that takes the seasonal ups and downs into account while aiming to protect against slumps.
TrueShares Seasonality Laddered Buffered ETF (ONEZ) is just that. ONEZ aims to achieve capital appreciation with the potential for reduced volatility compared to the U.S. large-cap equity market using a fund-of-funds approach. It leverages over 90 years of historical market seasonality performance data to inform a monthly portfolio rebalance.
For the St. Leger Stakes this year, you might bet on a horse, but don’t bother betting on what the market might do. Consider ONEZ instead.
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