Sell in May and Go Away? Absolutely Not -- 1 Artificial Intelligence (AI) Stock to Buy Hand Over Fist Instead.
If you regularly invest in stocks, you've probably heard the saying "sell in May and go away." It came about because the S&P 500 typically delivers weaker returns in the six-month period between May and October, compared to the six-month period between November and April.Seasonality is likely the culprit. There is less trading activity in the warmer spring and summer months because Wall Street bankers and fund managers take time off, much like everybody else. But according to the Corporate Finance Institute, the S&P 500 averages a return of 2% between May and October each year, dating back to 1945. It's less than the average gain of 6.7% for the rest of the year, but it's still a positive return.Therefore, selling in May would result in a worse return over the long run than staying in the market year-round. That's why investors might want to buy stocks this month, especially since the S&P 500 is trading at an 8% discount to its all-time high right now due to simmering global trade tensions.Continue reading
If you regularly invest in stocks, you've probably heard the saying "sell in May and go away." It came about because the S&P 500 typically delivers weaker returns in the six-month period between May and October, compared to the six-month period between November and April.
Seasonality is likely the culprit. There is less trading activity in the warmer spring and summer months because Wall Street bankers and fund managers take time off, much like everybody else. But according to the Corporate Finance Institute, the S&P 500 averages a return of 2% between May and October each year, dating back to 1945. It's less than the average gain of 6.7% for the rest of the year, but it's still a positive return.
Therefore, selling in May would result in a worse return over the long run than staying in the market year-round. That's why investors might want to buy stocks this month, especially since the S&P 500 is trading at an 8% discount to its all-time high right now due to simmering global trade tensions.
