Sell In May And Go Away: Does The Trading Strategy Hold Up In Election Years?
Portfolio Pulse from Piero Cingari
The 'sell in May and go away' strategy, suggesting the stock market underperforms from May through October, is questioned by historical data and market trends. Analysis shows that the S&P 500 index has had positive average returns during these months since 1950, with even higher returns during presidential election years. The strategy might be overly simplistic and potentially disadvantageous, as election years do not necessarily lead to increased market volatility. The SPDR S&P 500 ETF Trust (SPY) rallied over 20% in the six months leading up to the November 3, 2020, presidential election.
May 02, 2024 | 4:18 pm
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The SPDR S&P 500 ETF Trust (SPY) experienced a significant rally, over 20%, in the six months leading up to the November 3, 2020, presidential election, indicating strong performance during this period.
The SPDR S&P 500 ETF Trust (SPY) directly reflects the performance of the S&P 500 index, which has shown positive average returns during the May-October period historically, and even more so during presidential election years. The significant rally of over 20% in the six months leading up to the November 3, 2020, presidential election further supports the notion that the 'sell in May and go away' strategy may not be the best approach, especially in election years with an incumbent president running.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100