There is an old stock market adage that states that every year one should “sell in May and go away”, not reinvesting in equities until November. This saying is based on the generally held principle that stocks rise more in the 6-month period from November to April than from May to October. The fact that significant market declines have occurred in late summer or early fall – like the 1987 market crash – has helped to reinforce this belief.
Upon examining the actual data, over the last 50 plus years, stocks do indeed perform better in the November-April semester than in May-October. This is seen on the bar chart below, which demonstrates that in the last 52 years, the S&P 500 has averaged a 6.5% gain during November-April versus only a 1.6% gain the rest of the year, a difference of 4.9%. The NASDAQ
NDAQ
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