Sell in May and Go Away? Smarter Portfolio Management

Author: CapWealth

Every year, as spring turns to summer, the old investing adage “Sell in May and go away” begins to make the rounds again. It’s a saying rooted in the idea that the stock market tends to underperform during the summer months, prompting some investors to step aside and re-enter the market in the fall. While catchy and often repeated, this idea deserves a closer look, especially in today’s environment where market volatility remains elevated and short-term noise can distract from long-term goals.

Historically, there is some truth to the idea that stocks underperform during this period. Since 1926, the S&P 500 has posted stronger average returns from November through April than from May through October. But while those colder months may appear to outperform, the summer stretch isn’t exactly a slump. In fact, since 1990, the S&P 500 still posted an average return of 3% during the so-called weaker half of the year. That’s hardly a signal to step aside. Missing out on even one segment of market growth can be costly, not only in terms of short-term gains but in long-term compounding power. Effective portfolio management considers these long-term compounding effects when building investment strategies designed to weather full market cycles.

Trying to time the market—whether based on seasonal trends or emotional reactions to headlines—has long been one of the biggest pitfalls for individual investors. Even professionals find it difficult to consistently predict short-term movements. Markets move fast, often in reaction to news or economic data that no one saw coming. Reacting in the moment or leaning on outdated seasonal strategies can lead to whiplash and missed opportunities. That’s why long-term investors are typically better served by staying invested through the ups and downs, rather than jumping in and out in response to historical patterns or gut feelings.

In uncertain times, simple ideas offer a sense of control, so it’s understandable why rules-of-thumb like “Sell in May” persist. But oversimplified strategies are not a substitute for fundamental or technical analysis. The market is influenced by countless factors: earnings reports, interest rates, geopolitical events, and investor sentiment, to name just a few. Relying on a single seasonal rule ignores the nuance and complexity that drive real performance. A sound portfolio management strategy is grounded in analysis, diversification, and a consistent approach tailored to an investor’s goals.

We believe that a well-diversified portfolio built with resilience and flexibility offers a more reliable path forward than any calendar-based strategy. With an in-house investment team focused on hands-on portfolio management, we’re able to actively adjust strategies to endure market highs and lows. That flexibility helps our clients stay invested and confident, even when headlines may suggest otherwise. Our approach is designed to help investors participate in growth while mitigating risk, regardless of the time of year.

Ultimately, the question isn’t whether to sell in May, but whether your portfolio is built to endure and grow through all seasons. Investing is a long game, and history has shown that staying in the market, through headlines, through seasons, through noise, has been one of the most effective ways to build wealth. If you’re unsure about how your portfolio is positioned or feel tempted to make a move based on a headline or old saying, let’s talk. We’re here to guide you with thoughtful portfolio management that focuses on what really matters: long-term progress, not short-term predictions.