Why stocks hate summer

Perhaps surprisingly, the old adage “Sell in May and go away” is good advice: the markets tend to take a turn for the worse in the summer. Find out why at Moneyweek.co.uk - the best of the week's international financial media.

The most famous market adage of all is, "Sell in May and go away; stay away till St. Leger's Day." The 226-year-old St. Leger horse race, run in mid-September, marks the climax to the flat-racing season. The inference here is that there is no point trading in the summer because all the brokers and fund managers will be doing a bit of what Michael Neill in the FT calls "surf and turf"; namely, hanging out on the beach, or at sporting events such as Wimbledon and Ascot. That means that volumes will be low and markets more likely to fall. A large section of the City considers this complete nonsense. There's a "harder working culture to the City" than there used to be, insists Hilary Cook of Barclays Stockbrokers in the Daily Express. Selling in May and buying back in September is an "eccentric form of market timing", says David Kuo on Motleyfool.com. And a pointless one. It is, he says, "no more accurate than flipping a coin". But he's wrong.

You can time the market

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