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Investment markets have their own folklore, with ‘sell in May and go away’ being one of the most repeated. Although a catchy mantra, this saying doesn’t stand up to scrutiny.
The ‘sell in May’ idea is often paired with buying back in September (specifically St Leger Day – the day of the Doncaster horse race). The observation behind this is that equities have, on average, been stronger from November to April than from May to October. However, long-term investors treating the adage as a rule can be costly.
Will McIntosh-Whyte, Rathbone Multi-Asset portfolios fund manager, says: “Studies have explored the pattern and, while S&P 500 returns have historically been lower from May to October, selling in May has often meant investors forego gains. Last year is a good example: investors who sold in May were left on the sidelines as US equities rallied more than 23% in sterling, despite uncertainty over US tariffs and an April shock.”
Seasonality and the 'sell in May' hypothesis
Long‑term data does show a seasonal return pattern in equity markets in the US and internationally. However, turning that observation into a repeatable strategy is far less straightforward. A Bank of America review of almost a century of market data found no compelling evidence that selling equities in May reliably protected investors from major drawdowns — and in many cases it simply meant giving up gains.
McIntosh-Whyte continues: “Even during the historically weaker May‑to‑October period, equity markets have delivered positive returns in most years. Recent cycles have also seen meaningful summer gains, highlighting how difficult it is to rely on calendar‑based strategies.
“In fact, nine of the last 10 years were positive. In 2015—the odd one out—losses were 5.4%, versus a 3.7% gain if you had stayed invested. In our 10-year sample, the ‘sell in May, buy back around St Leger Day’ approach would have cost an average of roughly 8%.”
Source: FactSet; S&P 500 total returns between 30 Apr and 13 Sep in sterling
“You also need to consider transaction costs, taxes and the risk of delayed re‑entry. One of the biggest risks of stepping out of markets is missing recoveries—by the time confidence returns, a large part of the rebound has often already happened. Together, these factors can outweigh any potential benefit from seasonal strategies, particularly for long‑term investors,” says McIntosh-Whyte.
Portfolio construction over predication
Volatility can tempt investors to reduce risk or move to cash — seasonally or otherwise — but long‑term evidence suggests repeated attempts to time markets have been detrimental to outcomes.
McIntosh-Whyte adds that behavioural biases can make timing decisions even harder: “Studies consistently show investors tend to buy and sell at unfavourable points, often reacting to short‑term moves rather than long‑term fundamentals. For long‑term investors, the biggest risk hasn’t been volatility itself but being underinvested at critical moments.
“Well‑constructed multi‑asset portfolios balance risk and return across market cycles, recognising volatility as a normal feature of investing. Rather than trying to predict short‑term moves or rely on seasonal patterns, our approach emphasises diversification, asset allocation and discipline—so we can take advantage of short-term volatility, not be driven by it.
“Volatility is inevitable. Maintaining discipline through it is key to achieving long‑term investment objectives.”
Ends
