“Sell in May, then Go Away” used to be a common theme in the investment world.
This referred to the idea that traders would be occupied during summer months vacationing and enjoying the warm weather and are not as easily available to watch markets and make educated trades. This would in turn reduce liquidity in the markets and exacerbate any volatility which caused a lot of stress on traders during the summer months.
Today, that explanation just doesn’t add up with access to markets, data, and trades quite literally at the palm of our hands. You will find it very hard to really “Go Away”.
Whether you go away or not the ”Sell in May” strategy actually works, and they have data to back it up. It seems that seasonality is a real thing, and something to be looked at. If you’re a DIYer this may be something to look in to- it shows a strong success rate and you even get to take the summer off!