It’s May. Is that a good reason to sell out of the market? According to an old adage, yes. According to a timely strategy, maybe not.
And over the past two decades, May has become one of the better months. But the strategy still had some weight, because June, July, August and September have been the worst four months for the market.
But this year might be a little different…because of November. In election years, the age-old strategy seems to lose some of its currency. The market has shown a tendency to rally through the summer before an election.
So maybe this is not the year to “sell in May and go away”. The phrase is catchy. It rhymes. But a calendar and a rhyme is not an investment strategy in my opinion. And more to the point, the market is a buy, and trend indicators simply don’t support selling right now. And looking at a proxy for the equity market, S&P 500 SPDR (SPY), the fund signaled a long-term buy in January, and has held that signal. May is off to a rocky start (the fund is down -2.4%), but its long-term signal is still intact.