‘Sell in May and Go Away’: Does the old Wall Street adage still hold in 2026? – Global Markets News

“Sell in May and go away is a great headline, but a weak strategy, especially in 2026. Over 26 years, the May–October period has still delivered +0.39% on average, versus +0.59% for the full year, hardly a compelling gap,” says Subho Moulik, Founder & CEO, Appreciate.

Sell in May and Go Away — What it Means

Historically, the idea behind “Sell in May and Go Away” is that the stock market underperforms in the summer months of May through September. ‘Sell in May and Go Away’ in no way implies that there will be a decline in the market during that month.

The “Sell in May and Go Away” approach urges traders to sell their stocks in May, keep their money in a bank, and re-enter the market in November, aiming to protect cash during the summer when market fluctuations are minimal. But, is there any historical data to back it up?

According to Corporate Finance Research, “Historical data have generally supported the ‘Sell in May and Go Away” adage over the years and since 1945. The S&P 500 Index has recorded a cumulative six-month average gain of 6.7% in the period between November to April, compared to an average gain of around 2% between May and October. Furthermore, the S&P 500 typically generates positive returns roughly two-thirds of the time from May to October, while that percentage rises to 77% from November to April.”

Adam Turnquist, Chief Technical Strategist, LPL Financial, says, “As the calendar turns to May, seasonal trends re-enter the conversation. Historically, May has been a relatively lackluster month for equities. Since 1950, the S&P 500 has delivered an average return of just 0.4% and finished higher 62% of the time, ranking as the fifth-weakest month of the year when it comes to returns.

More recently, however, the data tells a different story. Since 2013, May has averaged a stronger 1.5% return, with 12 of the past 13 years ending in positive territory. This suggests that while long-term trends remain subdued, recent performance has been far more constructive.”

The Risks

However, one should not construe this as a strategy, especially for long-term investors. What drives the market in the short-to-medium term are the economic data, earnings news, and, as the current environment shows, the geopolitical events. “Markets today are driven by earnings and liquidity, not calendars—so staying invested and selective matters more than timing May,” adds Moulik.

Investors who completely withdraw from the market for a few months run the risk of missing out on profit possibilities that present themselves during that time, particularly given the shifting economic landscape.

“Despite these seasonal trends, LPL Research does not advocate for investors to exit equities during this period. However, ongoing geopolitical uncertainty, particularly surrounding Iran, and its implications for growth and inflation are likely to keep volatility elevated. The reopening of the Strait of Hormuz, while potentially positive, introduces second-order effects that remain difficult to quantify at this stage,” adds Turnquist.

And, for a long-term investor, timing doesn’t matter as has been proved in several studies done in the past. As data shows, equities tend to drift upwards over the long term.

US Markets at Start of May

Thanks to the AI-led euphoria in the market, the US markets are at a high despite the unclear and conflicting signals emerging out of the Iran war. S&P 500 and Nasdaq are at record highs, even as oil prices don’t look to fall anytime soon. Oil prices have risen over 50% since the outbreak of the Iran war.

“The concern around ‘highs’ is misplaced. Historically, forward returns after new highs have been slightly better than average, about 9.7% vs 9.3% over one year, and 8.6% vs 8.1% over three and five years. Highs have not been a negative signal,” says Moulik. “The direction from here will be set by earnings and liquidity, not by the fact that markets are at highs,” adds Moulik.

So, what are the big concerns for the US market investors? Rising oil prices are likely to keep inflation at higher levels for longer, impacting corporate margins. A higher inflationary scenario will likely keep the US Fed keeping rates higher for longer, and avoid cutting rates.

Markets will likely balance between oil prices, inflation, interest rates, and the uncertainties around the geopolitical situation, if earnings and economic data don’t indicate a stagflation scenario.

Nic Puckrin, macro analyst and co-founder of Coin Bureau, points towards a disturbing trend emerging in the markets. “The US stock market has shrugged off the Iran war entirely, but its reliance on the AI trade is concerning. The trade is quickly becoming crowded, which is typical of late-cycle positioning – meaning a repricing is getting closer,” says Puckrin.

“One sign of this I’m watching is random companies outside the sector pivoting to AI to save their struggling share prices, including a Japanese toilet maker. This is eerily reminiscent of the Bitcoin corporate treasury trend of last year, and could be a harbinger of a major sell-off. It’s a signal that should make any investor very nervous,” adds Puckrin.

Disclaimer: The information presented in this article is based on publicly available data and expert opinions at the time of publication. The expert views and data cited in this article are for educational purposes only and should not be treated as a recommendation to buy, sell, or hold any security. It does not constitute financial, investment, or legal advice. Investment in securities markets is subject to market risks. Readers are strongly advised to consult a registered financial advisor before acting on any information contained herein.