The saying ‘sell in May, and go away’ is a well known Wall Street saying. The saying however is based on good evidence. If you take a look at the S&P500 over the last 71 years you will be able to see why.

Winter boost for prices

Holding the S&P500 from October 31 through to April 30 gives an average return of +6.27%. If you had taken this each year for the last 71 years it would have given you an annualised return of +13.04%. The win ratio would have been 77.14% and the maximum profit would have been 24.48%.

SP500

Summer sadness for stocks

The returns from May to October are less impressive. Now compare this to if you bought the S&P500 in May and held it until October 31. You would have had an average return of only +1.17%.

SP500

The conclusion

Over 71 years the S&P500 clearly sticks to the rule that it is better, over the long term, to sell in May and go away. Statistically, buying stocks from October 31. This is why many investors are wondering whether now is the time that stock markets will have a deeper correction lower. The seasonal dynamic may or may not play out this year. However, being aware of it is very helpful.


Learn more about HYCM

High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD skyrockets to 1.2150 on poor US jobs figures

EUR/USD has hit a new multi-month peak above 1.2150 after the US reported an increase of only 266,000 jobs in April against nearly one million expected. The dollar is under immense pressure. 

EUR/USD News

GBP/USD soars toward 1.40 after disappointing Nonfarm Payrolls

GBP/USD has been extending its gains after the US Nonfarm Payrolls badly disappointed with an increase of only 266,000 jobs in April, nearing 1.40. Earlier, sterling benefited from the UK Conservative Party's gains in local elections. 

GBP/USD News

XAU/USD soars above $1,835 after weak Nonfarm Payrolls

Gold has leaped above $1,835 after the US reported an increase of only 266K jobs in April, far below expectations. Lower US yields support the precious metal.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Majors

Cryptocurrencies

Signatures