Sell in May and Go Away? Not With the 2026 Stock Market

The month of April brought strong performances for both the S&P 500 and Nasdaq, marking their best monthly gains since 2020. As we enter the month of May, investors are faced with the age-old adage of “Sell in May and go away,” which suggests stepping away from the stock market during the summer months and returning in November when conditions are historically more favorable.

However, recent market trends have challenged the relevance of this strategy. Historical data shows that the period between May and October typically yields the weakest returns for the S&P 500, averaging just 2.1% gains. Despite this historical trend, the past 12 years have seen an average return of 5.1% during this period, indicating a shift in market behavior.

In light of current market volatility driven by factors such as the ongoing Iran war and geopolitical tensions, traditional seasonal patterns may not hold as much weight. The market’s response to developments such as potential peace deals and strong corporate performances from companies like Apple, Roku, and Moderna suggests that investor confidence remains high.

Additionally, logistical concerns such as tax implications should be considered before making any hasty decisions to sell in May. Selling at a time when the market is at or near an all-time high could trigger capital gains taxes, potentially eroding returns in the long run.

A recent analysis by Eric Wenz of American Century Investments emphasizes the importance of holding onto investments rather than selling during market dips. Comparing the performance of a “sell in May” strategy against a buy-and-hold approach over nearly 50 years, Wenz found that the buy-and-hold strategy significantly outperformed, yielding a substantial increase in investment value.

Ultimately, the decision to sell in May should be carefully weighed against the potential long-term benefits of staying invested. While historical patterns can provide valuable insights, they are not always indicative of future market behavior. As we navigate through the uncertainties of the market, it’s essential to consider all factors before making any investment decisions.