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I Repeat: Don't Sell In May (Or Go Away)

Louis Navellier profile picture
Louis Navellier

By Gary Alexander

Looked at from 37,000 feet, this market is the essence of flatness – like Central Kansas in “fly-over” America. Last week, the S&P 500 fell by (hold your breath) 0.23 points. That’s less than 0.01%. Year-to-date (through Friday), the S&P is down 3.7 points, or 0.14%. For the month of April, the S&P is up 1.1%, which sounds like a gargantuan number compared to last week, but it’s still frustratingly small.

After March’s 2.7% decline and April’s tepid 1.1% gain, should we now compound our pain and “Sell in May and go away”? After all, “Sell in May” was a winning formula, historically, from 1950 to 2012.

WARNING: The following chart could be misleading. It is for historical informational purposes only!


Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Past performance really does not indicate future performance. In fact, this chart is somewhat misleading.

Five years ago, I wrote the following headline in MarketMail (for April 29, 2013): “This Bull Market Has Legs: Don’t ‘Sell in May & Go Away.’” I guess I got lucky, since that the “Sell in May” formula stopped working that year forward. In the last five years, the S&P has gained an average 5.55% from May 1 to October 31 (the historically “bad” months), while it averaged only 5.15% from November 1 to April 30:


The “Sell in May” theory has another major flaw. If you sell, when do you plan to re-enter the market? July is the #2 month in the last 100 years (and August is #5), according to Bespoke Investment Group’s Seasonality studies. Do you really want to exit stocks for just two months? And here’s a shocker: October is suddenly the #1 best month over the last 20 years – since 1998 – up an average 2.5%!

This article was written by

Louis Navellier profile picture
Navellier & Associates was founded by Louis Navellier in 1987 and since then has guided thousands of investors by applying our disciplined, quantitative investment process to a broad range of equity products. Every day, investors hire Navellier to manage their assets in a private account, mutual fund, or defensive portfolio. For over 25 years, we’ve been zeroing in on opportunities for long-term growth. We employ a veteran team of investment and client service professionals who deliver exceptional, personal service and industry-leading information to our clients. _________________________________ Important Disclosures that Accompany Navellier & Associates Articles: *Navellier may hold this security in one or more investment strategies offered to its clients. None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation of any offer to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed were or will be profitable. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for you. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. One cannot invest directly in an index. Results presented include the reinvestment of all dividends and other earnings. Graphs are for illustrative and discussion purposes only. Although information has been obtained from and is based upon sources Navellier believes to be reliable, we do not guarantee its accuracy and the information may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date of the report and are subject to change without notice. This report is for informational purposes and is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment making decision. Any decision to purchase securities mentioned in this research must take into account existing public information on such security or any registered prospectus. Past performance is no indication of future results. FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not intended or written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

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