Sell in May: What’s the Historical Record?

Today is the last day of April. Believe it or not, we’re already one-third of our way through this decade. It’s at this time of year we often hear the old Wall Street adage, “sell in May and go away.”

I recently crunched the data on the Dow’s historical returns — and by that, I mean every single day for the last 117 years since the index was born. I looked over the numbers and it turns out that the Dow has performed rather poorly from early-May through late-October.

Specifically, from May 6th to October 29th, the Dow has gained, on average, only 0.3%. That’s just shy of half the year (176 days to be exact). For the other half, the Dow has gained an average of 6.96%.

Just to be clear, these numbers don’t include dividends. Also, I don’t believe there’s any advantage for investors in trading around these events. I just think it’s fascinating that after 117 years, some definite patterns have evolved.

Posted by Eddy Elfenbein on April 30th, 2013 at 12:10 pm

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