Both the S&P 500 and Nasdaq closed April with their strongest monthly performance since 2020. Whether that momentum continues in May remains to be seen.
Historically, May started a six-month bearish season in the US, underscoring the century-old investment adage: “Sell in May and go.”
“The view suggests that investors should move out of cash during the summer months and re-enter the market in November, when conditions have been historically favorable,” Adam Turnquist, chief technical strategist at LPL Financial, wrote in a research note Thursday.
But these days, that strategy doesn’t hold much relevance — even if markets are soft in the summer. Turnquist analyzed market trends between May and October since 1950. Indeed, he found that the six-month period has historically produced the weakest return for the S&P 500, averaging just 2.1% of gains.
Recently, however, profits between May and October have increased significantly. Over the past 12 years, Turnquist said, the average return has been 5.1 percent.
“Seasonal patterns can provide a useful overview of history, but they are not always a reliable guide to what is to come,” he wrote.
“Sell in May” may be the worst advice this year. Given the volatility of the market due to the ongoing war in Iran, historical returns become very useful.
Lately, oil supply through the Iranian-controlled Strait of Hormuz has driven the markets – not seasonally – forward. Rising stock prices suggest investors are optimistic that a peace deal between the US and Iran will finally be reached.
Meanwhile, at home, major firms like Apple, Roku and Moderna are reporting better-than-expected first-quarter performance and making waves in part because of expected tax refunds from the Trump administration.
These changes alone reduce the importance of selling this month of May in particular.
But the tax concern of making a sale when the market is at or near a peak should not be ignored either. Selling in a taxable account may result in capital gains taxes, for example, which can destroy returns even if you re-enter the market later this year at the same price, according to Hook Wealth Management.
A separate analysis published last month by Eric Wenz, associate portfolio manager at American Century Investments, emphasized the importance of holding instead of selling despite the dips.
Wenz showed the performance of $1,000 invested in the S&P from 1976 to 2025, pitting “selling in May” against just buying and holding. After nearly 50 years of growth, the “May sale” investment jumped to just over $46,000 for a 4,535% increase.
Meanwhile, the buy-and-hold strategy saw the value of the investment rise to nearly $295,000 – a 29,179% increase.
“Long-term portfolios that follow a buy-and-hold strategy consistently outperform those that come out in May,” Wenz said, “proving that sticking to investments throughout the seasons has yielded better results.”
