Jack A. from New Haven, CT asks: Dear Mitch, I’ll admit I probably made a mistake. With all the volatility and uncertainty going on, and given the recovery in April, I thought this would be a good year to try “sell in May and go away.” So far, it’s not looking great! But I’m still skeptical about what’s coming next for the economy. Do you think the “sell in May” mantra might still apply for the next few months?
Mitch’s Response:
Unfortunately, I have to agree with your assessment that it was a mistake to “sell in May and go away.” Even if it turns out being correct, i.e., the market falls between now and September, I don’t think these types of short-term market timing moves are prudent for long-term investors. Over time, they will hurt your returns far more than they’ll help, in my view.1
What’s more, I just don’t think the “sell in May” mantra is a good investment thesis. For one, it does not hold water in a historical context. Looking back at S&P returns since 1925—which, to note, the formal S&P 500 index was formed later but there are early records available—the average return for the month of May is +0.3%. February has historically been a weaker month (+0.2%), and there was only one month that averaged negative returns (September, -0.8%).
Is Now the Time to Sell—or Stay the Course?
Market uncertainty has many investors questioning their next move. But history shows that short-term selling often does more harm than good—especially when the signals are mixed.
Our free May 2025 Zacks Market Strategy Report2 explains why reactive moves fall short—and what’s ahead for the market. Topics covered in this month’s report include:
- The U.S. economy’s surprising strength in Q1 2025
- Central banks are cutting rates. One holdout: the U.S. Federal Reserve
- Understanding earnings revisions trends
- The bottom line for investors
If you have $500,000 or more to invest and want to learn more about strategic investment opportunities, click the link below to get your free guide today!
Download Your Copy of Zacks May 2025 Market Strategy Report Today!2
Looking more broadly at the theory that May to October returns are weaker historically than November to April, there’s a fair point to be made there. History shows that to be the case. But weaker returns do not mean negative returns. In fact, the May 1 to October 31 timeframe has been positive over 70% of the time, which means your chances of getting the trade correct are pretty slim.
In my view, it is not worth it for a long-term investor to potentially miss out on further gains just because of a calendar quirk that only works sometimes. As demonstrated above, markets do not follow calendars, and so investors shouldn’t either (unless you are making some changes for tax purposes at the end of a given year, perhaps). In my view, investors would be assuming more risk trying to time the market than just focusing on a longer-term strategy and outlook.
We’re still in a period of trade and economic uncertainty, to be sure, and I expect more volatility in the months ahead. But volatility works both ways, and as we have already seen in recent weeks, the administration can pivot quickly on trade policy. There have mostly been positive surprises since “Liberation Day,” which has largely driven the rally. Underlying economic fundamentals remain strong, so more positive surprises from here would result in further gains, in my view.
At the end of the day, there are not really circumstances—and certainly not the “sell in May” mantra”—that make it a good idea to try and time the market over a three-month period. I’d rather take the longer view, set my course, and stick to it.
With market uncertainty ahead, staying informed is key. Our free May 2025 Zacks Market Strategy Report3 breaks down what’s happening and why the biggest moves may still be coming. Download your copy now for insights on topics, such as:
- The U.S. economy’s surprising strength in Q1 2025
- Central banks are cutting rates. One holdout: the U.S. Federal Reserve
- Understanding earnings revisions trends
- The bottom line for investors
If you have $500,000 or more to invest and want to learn more about strategic investment opportunities, click the link below to get your free guide today!
Disclosure
1 Investor Business Daily. May 22, 2025. https://www.investors.com/etfs-and-funds/personal-finance/stock-market-sell-in-may-and-go-away-not-so-fast-if-youre-a-long-term-investor/
2 ZIM may amend or rescind the “Market Strategy Report” guide for any reason and at ZIM’s discretion.
3 ZIM may amend or rescind the “Market Strategy Report” guide for any reason and at ZIM’s discretion.
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