Is It Best To ‘Sell in May and Go Away’ Amid Tariff Volatility? Experts Explain
Written by
Vance Cariaga
Edited by
Cory Dudak
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Investors who are exhausted by Wall Street’s recent volatility might find comfort in the old adage that you should “sell in May and go away.” As the name suggests, it essentially recommends unloading your stocks in May and waiting until the fall to start buying again.
The idea behind the strategy is that you can avoid traditional summer downturns when you sell stocks in May. You can then return to the market in November or so, when conditions are “typically more favorable,” according to a recent note from Adam Turnquist, Chief Technical Strategist at LPL Financial.
That probably sounds appealing right now, with the stock markets bouncing between extreme highs and lows amid anxiety over President Donald Trump’s sweeping tariff plans. Sitting it out for a while would no doubt ease that anxiety.
However, selling in May and going away is not necessarily the best advice this year — or any year, for that matter.
Why Do People Sell in May and Go Away?
The reason some investors have adopted the strategy is that May has “not historically been a strong month” for stocks, Turnquist noted, pointing out that it is the “fifth-worst” month for returns.
The wild card is whether the old rules apply in 2025. Stock values have whipsawed violently between selloffs and gains as investors try to get their arms around the Trump tariffs — and mostly they have gone down.
Trump’s first 100 days in office were the worst for both the Dow and S&P 500 since the first 100 days of President Richard Nixon’s second term in 1973, The Wall Street Journal reported. The Nasdaq had its worst performance since President George W. Bush’s first term in 2001.
This year’s dreary performance doesn’t necessarily mean you should sell in May and go away, though. For one thing, the stock markets have been on a recent winning streak.
“We have had a nice recovery in April, which is great to see,” Plaza Advisory Group wealth manager Andrew Briggs told Yahoo Finance. “That certainly means we could retest some lows here, but that’s not enough evidence for us to recommend selling in May and going away.”
Volatility ‘Comes With the Territory’
Beyond that, selling in May and spending the next few months on the sidelines is not a strategy that experts necessarily embrace.
As Fidelity noted in a recent report, the “sell in May/go away” talk surfaced earlier than usual this year because tariff-related volatility “cut short the part of the calendar” when stocks typically outperform. That volatility will likely continue until the tariff issue is resolved.
But should you go away from the stock markets over the summer?
“The data says no,” Fidelity noted. “History shows this calendar-based trading theory has flaws. More often than not, stocks tend to record gains throughout the year, on average. Thus, selling in May generally doesn’t make a lot of sense.”
Turnquist offered a similar assessment. Although he expects volatility to continue, he also noted it “comes with the territory, as clarity and comfort are usually elusive when the market is attempting to recover from a significant low.” LPL Research “does not recommend” that investors sell their equity positions and “go away” until November, Turnquist added.
Meanwhile, shaky markets often present opportunities to buy quality stocks at good prices.
“When things get shaky like this — and stay that way for a while — I don’t try to outguess every move,” said Edward Corona, a Florida-based trader and publisher of The Options Oracle Newsletter. “I just focus on positioning myself smartly so I’m not forced into any bad decisions…and rotate into companies with strong fundamentals.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
- Adam Turnquist, LPL Financial
- The Wall Street Journal, “Trump’s First 100 Days Were Worst for Dow, S&P 500 Since Nixon“
- Yahoo Finance, “‘Sell in May, go away’: Why Wall Street isn’t buying it this year“
Fidelity, “Should you ‘sell in May’?“ - Edward Corona, “The Options Oracle Newsletter“
