Would May 2025 be a good time to sell?

We should sell our stocks in May and wait out the summer, according to an old investing proverb

Does this still hold true?

Selling in May and moving on is an old investment adage. Don't return until September, when St. Legers Day, a famous British horse race day, occurs. Is the sell in May theory still valid, though?

The proverb is believed to have originated in a 1950s edition of Stock Trader's Almanac. Back then, financial professionals would usually take vacations for the majority of the summer. Those who remained would have to deal with summertime drifting markets. The problem wasn't so much that stocks would decline over the summer, but rather that they wouldn't move much.

Because professional traders depend on volatility to generate profits, the saying appears to have originated among them. It was thought to be best to sell your stocks in May, take a break for the summer, and then get back into the market when activity resumed in September.

Chris Beauchamp, chief market analyst at IG Group, states that "it probably applies more to professionals than it does to retail investors."

The idea might have been viable when trading was done in person, but is it still relevant today? There is probably much less of a decline during the summer in a world where trading is mostly done online.

Furthermore, as any seasoned investor will tell you, timing is not as important as time in the market. So, is selling in May still a good idea?

Do stock markets perform worse in the summer?

Whether there is any empirical evidence to support selling your shares in May is debatable. A rather hazy picture is painted by the results of the numerous studies that have examined the matter.

For example, Fidelity International discovered that only 14 out of the previous 38 years had positive returns from selling stocks in May. According to Investopedia, which looked into the trend dating back to the 1930s, summer returns have been higher than winter returns since the 1950s, but for the two decades prior to that, the opposite was true.

The fact that each of these studies uses a different set of criteriasuch as the precise months in question and the duration of what we define as the "summer"contributes to the issue. Some methods split the year into two six-month periods (November through April and May through October), but if you adhere to the proverb that mentions St. Legers Day, you would be out of business for no more than four and a half months.

It also depends on the specific stocks that are being discussed. The two aforementioned studies examined distinct indices. Summer returns will also be impacted if your portfolio is weighted in any one direction because different industries and national economies will exhibit different seasonality patterns.

As Beauchamp notes, changes in the global market can occur at any time. The "sell in May" strategy did well in 2022 - 2024, but anyone who applied that strategy in 2021 would have lost out as markets recovered after the post-Covid reopening.

There is some evidence to support the idea that average returns are higher in the warmer months. But if your plan is to sell in May and then buy back your shares in September or October, the market must have dropped, not just produce lower returns than you received during the winter, for you to make money.

The evidence for that occurring is much weaker. According to a 2023 Manulife Investment Management study, a buy-and-hold approach outperformed selling in May compared to the previous 10-, 20-, and 50-year periods.

Is May 2025 a good time to sell your stocks?

Maybe the "sell in May" tactic is exaggerated. However, how might this year's summer months unfold specifically?

Thus far, 2025 has been a turbulent year for the stock market, and many of the more conventional guidelines have been abandoned.

Nonetheless, Beauchamp notes that the summer months may see the emergence of the largest source of market volatility in 2025 to date.

According to him, "the view at the moment is very strongly that the bad news hasn't arrived from tariffs." Data from the initial months prior to the tariffs going into effect is still being sent to us.

The markets have returned to above their pre-tariff levels after "pricing in complete Armageddon" for the past month.

As June and July approach and the May and June data begins to surface, things could start to look worse. At that point, markets may respond more adversely.

July marks the end of the 90-day reciprocal tariff pause that brought some much-needed calm following the tariff chaos. That might cause the stock market to become even more volatile.

Does that mean it's a good year to sell your shares in May? It would be ironic if that were the case, considering that the traders of the past sold in May for precisely that reasonthe lack of summer volatility.