LIVE MARKETS-Does "sell in May and go away" actually work?
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
DOES "SELL IN MAY AND GO AWAY" ACTUALLY WORK?
Analysts at LPL Financial and Deutsche Bank have crunched the numbers to understand how "sell in May and go away" - a strategy that involves dumping stocks in the month of May and returning in November - has fared over the years.
The period from May to October has historically been the worst six-month return window for the S&P 500 .SPX since 1950, according to LPL Financial calculations, with an average return of 1.8% and the index offering positive returns 65% of the time.
"This consistent seasonal pattern, coupled with the popularity of the phrase, may have turned it into a self-fulfilling prophecy over the years," said Adam Turnquist, chief technical strategist for LPL Financial.
In contrast, the November - April window has seen the most growth in the S&P 500, with the index clocking a positive return more than 77% of the time, with an average return of 7.2%.
While seasonality data can provide insight into what to expect in the future, Turnquist says it does not represent the current climate owing the lingering uncertainties over trade tariffs and monetary policy.
For Europe, economists at Deutsche Bank applied a selling the STOXX 600 .STOXX in May and re-investing in September strategy and noticed it would yield a 9% annualized gain compared to a 7.4% rise for a "buy and hold" strategy, comparing from 1987 until the present day.
But that might not be the full story as they said that this strategy underperformed a simple "buy and hold" approach in 24 of the 38 years that they calculated.
"You can sell in May, but you might as well toss a coin, and your chances of success would be similar," said Maximilian Uleer, strategist at Deutsche Bank.
(Shashwat Chauhan )
EARLIER ON LIVE MARKETS:
WALL STREET GETS A SPRING IN ITS STEP FROM EARNINGS CLICK HERE
S&P 500 INDEX BACK UP TO BATTLE 50-DMA CLICK HERE
AUSTRALIAN DOLLAR 'UNDULY SOLD OFF' - UBS CLICK HERE
VAGUE GUIDANCE SHIELDS STOCKS FROM TARIFF TUMBLE CLICK HERE
'THE SOONER, THE BETTER' FOR BOE TO CUT BASE RATE TO 3.5% CLICK HERE
FTSE 100 STEADY CLICK HERE
BEFORE THE BELL: LONDON GAINS AFTER STRONG US TECH RESULTS CLICK HERE
Related Articles
National Debt Bomb Ignited? Musk Warns U.S. Will Be 1000% Bankrupt Without AI
TradingKey - Tesla (TSLA) CEO Elon Musk recently issued another warning regarding the rapidly ballooning U.S. national debt. He stated clearly that without artificial intelligence and robotics, the United States will inevitably head toward fiscal bankruptcy.
Tesla Stock Outlook: Competing With Rivian, Robotaxi Potential, and 2026 Prospects
There is much conversation about the prospect of investing in Tesla (TSLA) as we move closer to 2026. The volatility of its share price in 2025 is leading many investors to consider if they should purchase shares of Tesla given the alternatives available in terms of electric vehicles (Rivian, etc.).
Why Sanae Takaichi Winning Japan’s Diet Election Led to a Surge in Japanese Stock Indices？
TradingKey - Reports indicate that the ruling coalition led by Japanese Prime Minister Sanae Takaichi has secured a single-party majority in the parliamentary elections held on Sunday (February 8). Following the news, the yen weakened slightly, while the Nikkei Index surpassed 57,000 for the first t
A Crash After a Surge: Why Silver Lost 40% in a Week?
TradingKey - Spot silver (XAGUSD) prices continue to decline. Silver plunged 20% on Thursday, breaking below $71 per ounce, with the sell-off intensifying on Friday as prices fell further below $64. Compared to the all-time high set on January 29, silver prices have retraced more than 40%, wiping out nearly all gains accumulated over the previous month.
