By Teresa Rivas
It's May 1st, but many people are likely already dreaming of summer vacation. Time to follow the old adage to "sell in May and go away," but remember to return in September.
Not so fast.
The phrase dates back to 18th century London, when months-long vacations were the norm for the financial elite--and no one else. (An alternative version of the saying is "sell in May and go away, and come back on St. Leger's Day," referring to a horse race historically held in mid-September.)
Yet the saying has persisted because old patterns die hard. As Barron's previously noted, September has typically been the worst month for stocks -- January is the best -- and August doesn't have a great track record, either.
Nor should investors have their hopes up too much for this month. "May has been a relatively lackluster month for equities," said LPL Financial Chief Technical Strategist Adam Turnquist in a note. "Since 1950, the S&P 500 has delivered an average return of just 0.4% and finished higher 62% of the time, ranking as the fifth-weakest month of the year when it comes to returns."
By contrast, Turnquist noted the fact that if you have to choose six months to be in the market, the smart money would be on the half-year from November to April -- which again, since 1950, has produced stronger returns than May through October. Likewise, the warmer months require a stronger stomach, as the CBOE Volatility Index is usually higher from July through October, typically peaking in late September or early October.
Nonetheless, those who prefer the phrase "time in the market beats timing the market," will appreciate recent work by Deutsche Bank analysts led by Maximilian Uleer. In a note, he said that while the "sell in May" strategy works somewhat better with European stocks, it's proven less effective than simple buy-and-hold strategies in the U.S. since 1973, according to his backtesting.
Investing in U.S. Treasuries did improve the "sell in May" strategy to the point that it's better than buy-and-hold, but Uleer added that "the success of the strategy again...is highly sensitive to timing." In fact, omitting just three exceptional years--1998, 2001, and 2002--reduces the annual performance "significantly," he found.
Overall, the sell in May strategy beat the market in only 22 out of 53 years, by Uleer's math, and more recently, adherents would have missed out: In 2025, U.S. equities gained 14% from May through September, while U.S. Treasures returned only 3%.
Uleer wrote that "the 'sell in May' strategy offers no greater certainty of success than flipping a coin. We prefer a fundamental investment approach and advise against relying on historical market patterns."
That's good news for long-term investors, and buy-and-hold means you can still take that vacation.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 01, 2026 13:52 ET (17:52 GMT)
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