Why it's time for 'sell in May and go away' to die

MW Why it's time for 'sell in May and go away' to die

By Joseph Adinolfi

Trading algorithms don't take summer vacations

The market's May adage no longer applies in the age of air conditioning and algorithmic trading, according to one Bloomberg Intelligence analyst.

One of the most popular pieces of conventional investing wisdom couldn't be more misguided, according to a recent analysis from Bloomberg Intelligence.

For more than a century, the phrase "sell in May and go away, and come back on St. Leger's Day," has been treated as dogma by many financial pundits. The logic behind it is firmly rooted in 19th-century London; back then, the city's financial elite would regularly escape their stuffy urban environs during the summer months. This often coincided with lower trading volumes, and dismal returns. (For the unfamiliar, the St. Leger Stakes is a British horse race that typically takes place in mid-September.)

But in the age of air conditioning and algorithm-driven markets, these conditions no longer apply, according to Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence.

"'Sell in May' made sense when 19th-century London's moneyed eliteswapped trading floors for summer estates - but 21st-century algo-driven markets that never sleep have undone that adage," Psarofagis said in written commentary shared with MarketWatch.

The Bloomberg analyst crunched the numbers and found that, over the past 33 years, stocks rose during the May-through-October period 25 times. By comparison, during the period between January and May, stocks registered gains on only 23 occasions. (These performance figures are based on the State Street SPDR S&P 500 ETF Trust SPY, an ETF that aims to track the S&P 500 SPX.)

To be sure, this analysis leaves out the months of November and December - historically strong months for stock-market returns.

And to be clear, returns during the May-through-October period have historically been weaker. Dow Jones Market Data analysis found that through October 2025, the S&P 500 has averaged a gain of 2.4% during the six-month period ending in October, compared with an average gain of 5.2% in the sox-month period ending in April. That is according to performance data going back to 1928.

Over the past 30 years, win rates for the November-through-April period have been slightly higher than win rates for the May-through-October period.

But things have started to shift over the past decade. Since 2016, the S&P 500 has averaged a gain of 6.9% during the six-month period ending in October. That compares with an average gain of 6.2% during the six-month period ending in April. Last year, the S&P 500 fell 4% between New Year's Day and the end of April, before rallying hard through the summer.

That isn't to say that trading activity doesn't lighten up during the summer months. Bloomberg's Psarofagis looked at ETF flow data, and found that inflows do tend to soften during the summer months. Monthly outflows for equity ETFs remain unusual, but the summer months have seen more of them since 2000. Also, investors see fewer ETF launches during the summer.

Bottom line: This year, investors have better reasons to sell stocks as the summer months approach. The Iran conflict is dragging on with no end in sight, and higher energy prices could eventually boost inflation, pressuring the Federal Reserve to leave interest rates on hold or perhaps even raise them.

Also, the energy shock unleashed by the conflict has already prompted parts of Asia and the Middle East to limit air conditioning as a way to conserve energy. If the stalemate over the Strait of Hormuz continues, those effort are likely to deepen and become more widespread, which could make for some fairly uncomfortable summer months.

Still, reflexively selling assets in May isn't as compelling an argument as it once was.

See: If you've ever been tempted to 'sell in May and go away' - now is the time

Michael DeStefano contributed.

-Joseph Adinolfi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 29, 2026 12:59 ET (16:59 GMT)

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