“Sell in May”: time to spring clean your investments?

It’s the month of May, which means that the investment press is pumping out the obligatory spew of articles on the wisdom (or otherwise) of adopting a “sell in May” strategy – also known, in the US, as “the Halloween effect”. The basic idea is that markets historically do better in the winter months (end-October to end-April) than in the summer months. Therefore, you should dump your stocks in early May, sit in cash (or short-term bonds), and not buy back in until pumpkin-carving season is over.

Is there any validity to the idea? Perhaps [...]