Many articles have been posted regarding the axiom: “Sell in May and go away,” which is in reference to studies that show that the market’s worst performance begins in May and ends in November. While performance is mixed on various years, it is helpful to study the last 5 years of market action (as evidenced by the Dow Jones) and determine whether this was an attractive strategy in recent history.

2006

2005

2004

2003

2002

2001

Results:

2006: Yes in the short term and No in the long term (would have been better to buy in June)

2005: No. Market highs were made in March and not retested until November

2004: No. Market high was made in February and exceeded in December

2003: Absolute no. Selling in May would have left enormous profits on the table.

2002: Yes. This year would have worked wonderfully to Sell in May.

2001: Yes. Perfectly. The high of the year was made in May and low was made in October.

Cursory results: 50% effective, IF that high.

It is still best to study and analyze the market daily or weekly, and not rely on old market wisdom, at least as it regards to actively trading the market. Investing is not simple – not by a long shot. The profits go to the diligent, not the lazy.