General / Expert Commentary
Fisher Investments’ Founder, Ken Fisher, Debunks: “Sell in May and Go Away”
Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher debunks the common myth that investors should “Sell in May and go away”, along with other seasonal stock market adages. This old saying suggests stock prices typically decline for a period of time starting in May. Therefore, investors should sell their stocks in May and buy back in to the market after the summer months to avoid potentially poor returns. As Ken wrote in his book Debunkery, seasonality myths like “Sell in May” or “So goes January” are just that—myths—and they are not supported by data.
Ken says that while May does have a slightly below average—but still positive—long-term history of returns, the period from May to September is also positive. During those months, only September is historically negative, and that can be attributed to four specific negative Septembers. According to Ken, basing investing decisions around seasonal investing adages is similar to predicting a bull market based on whatever team wins the Super Bowl—neither make logical sense. As Ken points out, markets frequently have some randomness to returns that calendars alone cannot explain.
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