"Sell in May and go away" is an adage that warns investors to divest their stock holdings in May to avoid a seasonal decline and to reinvest in November. But recent performance suggests that the advice is obsolete. Climate change may be affecting the markets too.
 | | Sell in May and Go Away | "Sell in May and go away" is a well-known financial-world adage, based on the historical underperformance of some stocks in the "summery" six-month period commencing in May and ending in October, compared to the "wintery" six-month period from November to April. If a trader or investor follows the sell-in-May-and-go-away strategy, they would divest their equity holdings in May (or at least, the late spring) and invest again in November (or the mid-autumn).
Some investors find this strategy more rewarding than staying in the equity markets throughout the year. They subscribe to the belief that, as warm weather sets in, low volumes and the lack of market participants (presumably on vacations) can make for a somewhat riskier, or at a minimum lackluster, market period. | | Read More » | | Related to "Sell in May and Go Away" | | | | Halloween Strategy | | Halloween strategy is a trading tactic, which posits that stocks perform better between October 31 and May 1 than they do during the rest of the year. | | Read More » | | | Indicator | | Indicators are statistics used to measure current conditions as well as to forecast financial or economic trends. | | Read More » | | | Cyclical Stock | | Cyclical stocks are equity securities whose price is affected by macroeconomic, systematic changes in the overall economy. | | Read More » | | | Seasonality | | Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. | | Read More » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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