Summer is around the corner, and so is one of Wall Street’s most repeated phrases: “Sell in May and go away.” It’s catchy, it’s seasonal, and it can sound like a clean, simple rule.
But investing is rarely served well by simple slogans.
Below is what the phrase is trying to capture, what the historical evidence actually suggests, and how to think about it in the context of your long-term plan—especially if you’re approaching retirement or already retired.
What does “sell in May and go away” mean?
The saying is shorthand for an old idea: stocks have historically produced stronger returns in the “winter” months (roughly November through April) than in the “summer” months (May through October). The “go away” part implies investors should reduce stock exposure for the summer and come back later.
In other words, it’s a form of seasonal market timing.
And that’s the key point: despite how harmless it sounds, it’s ultimately a market-timing strategy.
Where did the saying come from?
Versions of this phrase trace back to London’s financial district, tied to the old practice of leaving the city during the summer social season. Over time, the idea spread—especially because it seems to match some market patterns in certain periods.
Like many market adages, it has a grain of history behind it. The question is whether it offers a reliable, repeatable edge today.
Is there any truth to it?
There has been evidence of seasonality in market returns over long stretches of time. Some studies have found that average returns in winter months were higher than in summer months.
However, two important caveats matter for real investors:
- “Average” doesn’t mean “always.” Some summers have been strong, and some winters have been weak. The market doesn’t follow a calendar with consistency.
- Even if a pattern existed, capturing it requires being right twice: when you exit and when you re-enter. Missing a small number of strong market days can meaningfully change long-term results.
Seasonality may be an interesting observation, but it’s not the same thing as a dependable rule.
What can go wrong with acting on it?
1) You may miss sudden gains
Markets can rally quickly, often when sentiment is negative or headlines are noisy. If you sell and wait for the “right” time to come back, you’re making an implicit bet that you’ll recognize the turning point.
2) Taxes can quietly erode returns
Selling in a taxable account may trigger capital gains taxes. Even if you buy back later at a similar price, the tax bill can create a permanent drag.
For retirees who have built sizable taxable portfolios, this is a common “hidden cost” of tactical moves.
3) Trading costs and spreads add up
Even with low commissions, buying and selling can still create small frictions—spreads, execution prices, and the behavioral cost of reacting to every market wobble.
4) It can increase anxiety
A seasonal trading rule can turn investing into a recurring decision point: “Do I sell now? Did I wait too long? When do I get back in?”
For many investors, especially those trying to enjoy life and not live by market headlines, reducing decision-stress is a feature—not a weakness.
A more practical interpretation: use May as a check-in, not an exit
Instead of reading “Sell in May” as a command, consider using the start of summer as a natural time to do a portfolio check-in. Here are a few high-value actions that often matter more than a seasonal slogan.
1) Rebalance if your mix has drifted
If stocks have risen a lot relative to bonds (or vice versa), your portfolio may have drifted from your intended risk level. A disciplined rebalance can help you:
- keep risk aligned with your plan,
- avoid overconcentration,
- and maintain a “buy low/sell high” discipline without guessing market direction.
2) Revisit your cash needs (especially for retirees)
If you’re living on portfolio withdrawals, one of the most important summer prep steps is ensuring you have an appropriate cash buffer for near-term spending.
Many retirees use a structure like:
- cash for near-term expenses,
- high-quality bonds for intermediate needs,
- stocks for long-term growth.
This kind of planning approach aims to reduce the need to sell stocks after a drop—regardless of the month.
3) Review concentration and “headline risk”
If one stock, one sector, or one strategy has become a large portion of your portfolio, you may be taking on more risk than you realize. This is especially common after a strong run in a narrow part of the market.
A seasonal phrase can be a reminder to ask: “Am I still diversified the way I intended to be?”
4) Check that your plan still matches your life
Summer often comes with life changes: travel plans, family events, home projects, or helping kids and grandkids. A strong financial plan adapts.
If your goals, income needs, or timeline has changed—even subtly—it may be time to update your assumptions about:
- withdrawal rates,
- Social Security timing,
- required minimum distributions (RMDs),
- long-term care considerations,
- and tax strategy.
How this applies by life stage
If you’re 45–60 (peak earning years)
This is often the accumulation phase. The biggest drivers of long-term outcomes are typically:
- consistent savings,
- appropriate risk level,
- diversification,
- and staying invested through cycles.
A seasonal exit-and-entry approach can distract from the basics—especially if it leads to missing long-term compounding.
If you’re 60–75 (pre-retirement and retirement)
Sequence-of-returns risk becomes more important. Rather than trying to sidestep summer volatility, the more durable approach is often:
- aligning portfolio risk with required spending,
- building a thoughtful withdrawal strategy,
- maintaining a cash/bond cushion,
- and managing taxes.
These steps are designed to support lifestyle goals in both good markets and difficult ones.
The bottom line
“Sell in May and go away” is a memorable phrase—but it’s not a substitute for a well-built financial plan.
If anything, treat it as a timely reminder to:
- review your allocation,
- rebalance if needed,
- confirm you’re properly diversified,
- and make sure your cash flow plan supports your summer—and your long-term goals.
If you’d like to talk through whether your current portfolio is positioned appropriately for your goals and risk tolerance, I’m happy to help you evaluate it in the context of a long-term strategy.
Investment markets involve risk, including loss of principal. Past performance and seasonal patterns do not guarantee future results.