Historically, the best months to invest are October through May.
So the old Wall Street adage, “Sell in May & Go Away” means sell everything for the summer and reinvest in October.
This is just as bad an investing strategy as playing the Santa Claus Rally or the Superbowl Indicator or – sorry, folks – dollar cost averaging.
If you sold on May 31st this year, you would have sold at the bottom, locking in a 13.3% loss, and then missed the 12.8% GAIN we’ve seen since.
Obviously, it’s not October yet, so maybe it’ll play out this year.
But regardless of what this year does, we know what the market has done historically May through October.
Playing that strategy since 2011 would have been to your detriment 10 out of 12 years (see below).
The lesson?
Avoid any strategy that involves getting in and out of the market.
Instead, stick with my favorite adage “Always be fully invested,” and you should win over the long-term.
