Selling in May would have cost in 2021, especially US tech


“Sell in May and go away and come back on St Leger Day” is one of the stock market’s most enduring adages.

Its longevity is surprising given its record of being right almost as many times as it is wrong, according to Fidelity.

St Leger Day is tomorrow and if you had decided to sell says the fund manager, it would have cost pretty much everywhere in lost gains, though the biggest pain would have come from a sale of US tech shares.

Between 1 May and 31 August, Nasdaq jumped an impressive 21.6% says the investment house, a blow if someone did sell conceivably only a winner in tomorrow’s classic horse race would ease.

Elsewhere, though the picture is less clearcut – The S&P 500 is up 8.7%, with the FT All-Share, Dax, and FTSE 100 all gaining between 3-4%.

Only if you had sold Japanese blue chips would you be feeling good about yourself, with the Nikkei down 2.25%.

According to Fidelity, this mixed picture is to be expected as it says only 12 times out of the past thirty years has selling in May outperformed the FTSE All-Share says Ed Monk, associate director.

“2021 would’ve been a painful time for anyone following the old adage to ‘sell in May,” he adds.

“The giant US market, in particular, has gone from strength to strength this year and has hit multiple new highs as the summer has progressed.

“With markets elevated it is understandable that investors will look for the moment when the tide can turn but these numbers show that, once again, staying invested has proved the best policy.

“Decisions about your portfolio are far better made with firm investment principles, rather than superstitions in mind.

“Investors who chose to exit the market over the summer will not only have missed out on the opportunity to boost their returns, but now face having to buy back in at a higher price.”


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