Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Does it pay to ‘sell in May’?

With May on the horizon, seasoned investors might recall this old adage, ‘sell in May and go away, don’t come back till St Leger Day,’ which advocates selling out of the stock market for the summer months and returning in the autumn.

Jason Hollands Jason Hollands
27 April 2017
Maypole against a blue sky

The saying is believed to have its origins from the days when stockbrokers left the City for ‘the season,’ a period of sporting and social events including Royal Ascot, Wimbledon, the Henley Royal Regatta, Cowes Week and ending with the St Leger flat race in mid-September. Yet over time, it has come to be associated with a belief that the summer months are a dangerous period for investors, with a high incidence of market sell-offs.

Should investors listen to this old maxim?

The days of City professionals packing up shop for a long summer sipping Pimm’s and champagne at social events are a distant memory: not least because accepting lavish corporate hospitality is now frowned upon. These days, if a City professional is off on summer holiday, they’re almost sure to be forever checking news from the markets on a mobile phone or tablet, as information is now incredibly accessible.

Therefore when putting seasonality theories such as ‘sell in May’ to the test, it is probably more relevant to only consider data since the 'Big Bang' deregulation of the City in 1986 rather than longer periods when the London markets operated as a gentleman’s club. And over this 31-year period, there isn’t a compelling case to systematically exit the market every year between May and mid-September, a move which could also incur trading costs or potentially crystallise Capital Gains Tax liabilities.

What does the data show?

We conducted some research, looking at 31 years of total return data for the FTSE All Share Index (including dividends reinvested). We found that between 1 May and the second week of September, the FTSE All Share Index has delivered positive returns in 20 out of the past 31 years. This means that 65% of the time,investors would have made positive returns by staying invested over the summer. This compares to markets rising 77% of the time across the full calendar years over this 31-year period.

That said, true believers in the ‘sell in May’ mantra can undoubtedly point to notable summer sell-offs – some of which actually came in the early weeks of September – these being 1992 (-11.6%), 1998 (-12.6%), 2001 (-18.4%), 2002 (-21.2%), 2008 (-13.0%), 2011 (-10.9%) and 2015 (-9.6%).  

However, selective memory might mean ignoring the soaring summers of 1987, 1989, 1995, 2003, 2005, 2009 when the markets posted double-digit returns.

With stock markets currently riding high but volatility eerily low, it’s easy to so see why some investors might be wary of the outlook for markets this particular summer. In truth, it is near impossible to predict short-term market setbacks and the good times could well roll on for some time yet – global growth is picking up, business sentiment surveys have edged up and global earnings revisions have been positive this year. Investors with a long time horizon should stay invested rather than fret about what might happen over a short few months.

If you have any questions about your investments please call us on 020 7189 2400, request a call back using the button at the top of this page or email

Important information

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance. All data includes dividends reinvested.