2 Reasons Not to Sell in May and Go Away
Friday brought losses to Wall Street, with the stock market suffering daily declines to finish what was otherwise an extremely strong month of April. The drop wasn't too severe, with the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) all limiting their losses to between 0.5% and 1% on the day.
Every year at this time, investors with an appreciation for seasonality trot out the old maxim, "Sell in May and go away." This informal guidance, coupled with an admonition to buy back into the market in November, is designed to reflect that many of the market's worst performances have come in the late spring, summer, and early autumn months. Yet despite its simplicity, there are some excellent reasons why selling in May isn't necessarily your best move.
Markets were down most of the day, as investors consolidated their gains from earlier in the week. Earnings reports continued to indicate economic strength, but that was largely anticipated, and the question remains how long the upward momentum for the Dow, S&P, and Nasdaq can last.
Source Fool.com
