We’ve heard it a thousand times before and, almost surely, we’ll hear it a thousand times more: Sell in May and go away. This adage is among the oldest sayings in the markets, and there’s some truth to it. Around this time of the year, historical data indicate a slowdown in major indices. Taking this advice at face value, however, prevents investors from buying stocks on the cheap.
Before we get into why I think May presents a viable long-side opportunity, let’s briefly discuss the reasons investors traditionally sell in May. The adage comes from the “golden era” of trading when computerized charts and graphs were only available to the ultra-wealthy. Back then, Wall Street had a mostly “good ole boys” culture. In other words, stocks largely fed off the emotions of a singular demographic.
Today, the markets are much more egalitarian. Technology and the internet have brought investing opportunities to a wider demographic. While the Street still has a rich, white male bias, modern investors are much more diverse. Thus, when it comes