Sell in May and go away? Does the old adage hold true in 2025?

Every spring, investors are reminded of a curious old saying: “Sell in May and don’t come back till St Leger’s Day.” The advice, rooted in London’s financial folklore, suggests that stocks tend to underperform through the summer months, making it wise to step aside until September. But does this still make sense in today’s 24-hour, globally-connected markets?

What does the adage mean – and where did it come from?

The phrase comes from London stockbrokers of the 19th century, who would sell their holdings in May, decamp to the countryside for the summer, and only return to business after the St Leger Stakes horse race in early September.

At its heart, the adage reflects a seasonal pattern observed in stock markets: historically, the six months from November through April have produced stronger returns than the “dull” summer months. Studies across global markets (sometimes dubbed the “Halloween indicator”) have found evidence of this tendency.

For decades, many investors took the saying as gospel. But like many bits of market folklore, the reality is more complicated.

Historical performance: Myth or Reality?

Looking at historical data decades ago, there is some support for the adage. However, the seasonal effect has not been consistent year after year. Data has shown that over the past few decades, the “sell in May” strategy only worked in a minority of years — 12 in the past 50 years, to be exact*. 

In fact, an investor who put £1,000 into the S&P 500 index on January 1, 1975, would have over £340,000 if they held it until the end of 2024. Compared with an investor who withdrew their money each April 30 and reinvested it on November 1 would have just over £64,000*.

The key issue? Some of the market’s best days often occur in the summer months. Investors who step aside risk missing sudden rallies, which can dramatically reduce long-term returns.

Why the adage may be less relevant today

Markets today are very different from the days when brokers took long holidays. With globalisation, digital trading, and round-the-clock news flow, capital never really rests. Seasonal quirks can easily be outweighed by bigger forces such as monetary policy, economic data, or geopolitical events.

In 2025, tariffs, inflationary pressures, and concerns about global growth have dominated headlines, all factors far more influential than any calendar effect. Analysts increasingly caution against leaning on seasonality for timing trades. While short-term traders might still use it as one input, most long-term investors are better off ignoring it.

In context: 2025 market conditions

This year has been a volatile one. Equity valuations remained elevated in many regions, but opportunities appeared in sectors tied to commodities, technology, and Asia. For risk-averse investors, trimming exposure or rotating into defensive sectors may have seemed sensible entering the summer.

But wholesale selling, as the old rhyme suggests, would have meant missing some impressive fund performances. As we’ll see in the table below, several of our Elite Rated funds posted double-digit gains between May and August 2025, belying the idea of a sleepy summer.

Top 15 Best-Performing Elite Rated funds

The standout performance in summer 2025 came from resources and precious metals. With continued political concerns and worries about stretched stock market valuations, it’s unsurprising that traditional safe haven investments like gold have performed well. The Amati Strategic Metals fund soared more than 37%, while gold and silver-focused funds like Jupiter and Ninety One delivered gains above 25%.

Read more: Why gold, silver and lithium still have room to run

China and Asia also shone, with funds focused on Chinese equities posting returns of between 22% and 34%. It begs the question, are Chinese equities finally starting to shake off their recent dry spell? We recently covered the pros and cons of investing in China during the summer revival of the Chinese market in July.

Technology was another winning theme. Both Allianz Technology Trust and Allianz Global Hi-Tech Growth posted strong double-digit returns, as investors continued to chase AI-related opportunities.

Conclusion

“Sell in May and don’t come back till St Leger’s Day” may have reflected old City habits and historical quirks in market behaviour. But as our 2025 fund performance table shows, the adage is increasingly unreliable.

Yes, seasonal patterns exist, and for some investors they can be a useful consideration. But they are far less powerful than fundamentals like valuations, economic cycles, and sector trends. Long-term investors, in particular, are almost always better served by staying invested rather than trying to time exits and re-entries.

This summer serves as a timely reminder: the markets don’t always follow the script. Sometimes the best opportunities arise when investors least expect them.

*Source: American Century Investments, 9 May 2025