Bucking the Tradition: Why the ‘Sell in May and Go Away’ Strategy May Not Apply to the 2026 Stock Market
Table of Contents
Strong April Performance Ends, But Will It Sustain in May?
Both the S&P 500 and Nasdaq closed out April with their strongest monthly performances since 2020. Whether that momentum carries through May is yet to be seen.
A Historical Context: Selling in May and Going Away
Historically, May has kicked off a six-month season of lackluster returns in the U.S., reinforcing a centuries-old investing adage: “Sell in May and go away.”
Advisor’s Take: Ignore Seasonality in This Market
“The idea suggests investors should step away from equities during the summer months and re-enter the market in November, when conditions have historically been more favorable,” Adam Turnquist, chief technical strategist at LPL Financial, wrote in a research note Thursday.
Market Trends May Not Align with Historical Patterns
But these days, that strategy doesn’t hold much relevance — even if the markets do mellow out over the summer. Turnquist analyzed market trends between May and October dating back to 1950. Indeed, he found that the six-month period historically produced the weakest returns for the S&P 500, averaging just 2.1% gains.
Recent Market Performance Contrasts with Long-Term Trends
More recently, however, gains between May and October have notably picked up. Over the past 12 years, Turnquist said, the average return has been 5.1%.
The Iran War and Its Impact on the Market
“Seasonal patterns can offer useful historical perspective, but they aren’t always a reliable guide for what lies ahead,” he wrote.
Seasonality Takes a Backseat to Ongoing Events
“Sell in May” might be particularly poor advice this year. Given the market volatility due to the ongoing Iran war, historical returns become even less helpful.
Factors to Keep in Mind
Lately, oil supply through the Iranian-controlled Strait of Hormuz has largely driven markets — not seasonality. Rising stock prices suggest that investors are confident a peace deal between the U.S. and Iran will ultimately be reached.
Strong Earnings Reports Add to the Picture
Meanwhile, at home, major firms like Apple, Roku and Moderna are reporting better-than-expected first-quarter performance and making waves in part due to anticipated tariff refunds from the Trump administration.
Tax Considerations and Investor Decisions
These developments alone diminish the importance of selling this specific May in particular.
Risks of Selling at High Prices
But the logistical tax concerns of selling when the market is at or near an all-time high shouldn’t be ignored either. Selling in a taxable account could spark capital gains taxes, for instance, which would erode returns even if you re-entered the market later this year at a comparable price, according to Hook Wealth Management.
A separate analysis published last month by Eric Wenz, an associate portfolio manager at American Century Investments, underscored the importance of holding instead of selling despite dips.
A Projection of Long-Term Results
Wenz illustrated the performance of $1,000 invested in the S&P from 1976 to 2025, pitting “sell in May” against simply buying and holding. After nearly 50 years of growth, the “sell in May” investment jumped to just over $46,000 for an increase of 4,535%.
Results of Buying and Holding
Meanwhile, the buy-and-hold strategy saw the investment value skyrocket to nearly $295,000 — an increase of 29,179%.
Expert Take on Long-Term Portfolios and Seasonality
“Long-term portfolios that adhered to a buy-and-hold strategy consistently outperformed those that exited in May,” Wenz said, “proving that sticking with investments through all seasons yielded better results.”
