Should you sell in May?
The old investing adage says we should sell our stocks in May and sit out the summer. Is there any truth behind the saying?
One of the most often-repeated investing mantras says ‘sell in May and go away, don’t come back until St Leger Day’, referring to a well-known British horse racing day which takes place in September.
The saying is thought to date back to a 1950s edition of Stock Trader's Almanac. In those days, financial professionals would typically spend most of the summer on holiday. The issue wasn’t so much that stocks would fall over the summer, but that they wouldn’t do a whole lot at all.
“The rationale is simply that, back in the mists of time, the main market participants (think bowler hats and coffee shops in London) were all away on their summer holidays and socials,” said Ben Seager-Scott, CIO at advisory firm Forivs Mazars. “There simply wasn’t much of a market and everything, at best, drifted until everyone came back after the summer.”
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Let’s take a closer look at how ‘Sell in May’ performed last year, and how it has held up historically.
Did ‘sell in May’ work in 2025?
While the adage often fails to deliver, it rarely performs as badly as it did last year.
Major indices enjoyed encouraging returns between May and September, largely reflecting an uptick in investor sentiment following the chaotic fallout from Trump’s Liberation Day tariffs.
“Last year was a great example of when [selling in May] would not have worked out in your favour,” said Adrian Murphy, CEO of wealth manager Murphy Wealth. “Had you done so, you would have missed out on a good deal of the recovery from the tariff shocks in April – the S&P 500 rose more than 18% and the FTSE 100 gained more than 9% from May to mid-September
And the geopolitical tensions plaguing the market this year could be just as much of a reason to avoid selling in May in 2026 as they were last year.
“With the conflict in the Middle East, markets are volatile,” said Murphy. “No one knows how the situation will pan out in the short term, let alone the next few months and beyond.
“You are as likely to crystallise any losses and be forced to reinvest at a higher price at the end of the summer, as you are to make gains by buying back in again when the market looks cheaper,” Murphy added.
However, there is some evidence that trading volumes are lower over the summer and during the Christmas period. That can increase market volatility, because fewer buyers and sellers can necessitate larger jumps between prices in order to buy or sell a stock.
“But this is very much two-way,” said Seager-Scott. That extra volatility can push prices up or down, depending on sentiment.
“That may partly explain the Santa Rally effect,” Seager-Scott said, adding that there is little evidence that this is a seasonal pattern and rather a label that is applied in hindsight whenever markets happen to rise in December.
Do stock markets tend to underperform over the summer?
It’s questionable whether or not there’s any empirical evidence to support selling your shares in May. Various studies have looked into the results, and between them they paint a fairly blurred picture.
Fidelity International, for example, found that selling stocks in May generated positive returns in just 14 of the last 38 years. Investopedia investigated the trend going back to the 1930s and while it found that summers have generally yielded higher returns than winter since the 1950s, the opposite was true for the two decades before then.
Part of the problem is that each of these studies has a different basis – the exact months in question, for example, and how long we consider the “summer” to be. Some approaches divide the year into two six month chunks (November to April and May to October), but if you follow the old adage that references St Leger Day, you’d be out of the market for four and a half months at most.
It also depends on the particular stocks in question. The two studies above looked at different indices. Investopedia’s analysis found that while selling the Dow Jones index in May and switching to fixed-income investments over the summer produces superior returns, doing so with the S&P 500 yields the opposite.
Different sectors and national economies will display different patterns of seasonality regardless, so if your portfolio is weighted in any particular direction then this will also have an impact on summer returns.
There is some evidence that average returns are higher during the winter than they are in the summer. However, if your strategy involves selling in May then buying your shares back in September or October, the market has to have fallen – rather than just generate smaller returns than you got in the winter – in order for you to profit.
There’s far less evidence for that happening. A study from Manulife Investment Management in 2023 found that a buy-and-hold strategy beat selling in May over the preceding 10-, 20- and 50-year periods.
“In terms of good investment practice, given that markets tend to rise over time and, importantly, dividend income also accrues through the year, I’m not convinced opting to be sat in cash half the time makes much sense to me,” said Seager-Scott.
On that basis, time in the market, rather than timing the market, seems to be the more reliable (and easier) strategy.
