“Sell in May and go away?” Really?

You’ve heard the old Wall Street saw about “Sell in May and go away”?

Is that right?

Well, history tells us that not much in the way of positive returns are achieved from the first of May through the end of October.   Almost all returns appear to be clumped in the other six months of the year, from November through April.

But returns are still positive for May through October, and some years notably so.

Forget the technical banter in the chart below, just focus on the lines in the chart.  Blue tells us what a single dollar having been invested in just the months of May through Oct, from 1871 forward, has achieved.

Red tells us the same for the months of November through April, and Green tells us the combined value.

Stunning, isn’t it?

Starting with just a buck back in 1871, our imaginary investor would have accumulated about $400,000 today.  Sure, none of us has that long an investment horizon, nor does the chart account for inflation, taxes, or management fees.  But, come on, it’s whole lot better than a CD.

God bless you all.

 

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