If you are into investment newsletters like I am, you read a lot of them. Right now, almost every one of them is making mention of that yearly phenomenon summed up by a common Wall Street saying, “Sell in May and Go Away.”
The saying refers to the stock market’s habit of taking a summer swoon and a September plunge each year. It then recovers for its traditional year-end Santa Claus rally. And there is some truth in the saying.
Remember last year? The market peaked in late April and then didn’t return to rally mode until the leaves were falling in the fall. Market historians point to the pervasiveness of the market’s tendency to follow this pattern. Here’s the monthly history, and it’s true – the summer is not pretty when it comes to stock prices: