There is an old Wall Street adage that sounds like a nursery rhyme and has about as much investment merit as one as well.

“Sell in May and Go Away’ sounds compelling. In truth since 1928 the May to October period has indeed provided the lowest returns for the S&P. According to recent Bank of America research the returns have been positive by 2.10% about 65% of the time. For perspective, the best 6-month periods since 1928 have been the November through April periods during which it was positive by 5.09% 70 % of the time. So, there is a difference but hardly one worth making major investment changes over. Moreover, during the third year of a presidential cycle, the S&P has generated a 3.26% return from June through August meaning most of the time you would have missed a summer rally by selling in May.

So, the argument for getting out of the market in May and getting back in after October is hardly compelling and might be added to the many reasons not to try to time the market.

As usual, keeping an adequate amount of cash and or liquid securities to cover known or potential near-term expenses and remaining invested in the best quality companies for the longer term continues to be your best investment strategy.

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