Apr 29, 2026
For those who believe in financial folklore, May has long been the month to exit equities.
According to popular Wall Street wisdom, it's safest for stock investors to skedaddle in the spring, enjoy some summer sun and then buy back equities around Halloween.
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But a recent Bank of America report took a fresh look at this "sell in May and go away" strategy, and analysts say it probably won't work in 2026.
According to Business Insider, the Bank of America's strategists didn't see convincing evidence in 98 years of S&P 500 data that investors will miss massive downspells by selling so early (1).
If anything, people who blindly "sell in May" could miss out on extra gains.
Granted, the S&P 500's average gain was comparatively low at 2.4% between May and October, but things look a lot different when you shorten the timeframe. As Bank of America discovered, most of the pain for stockholders took place in the later months of August through October, which had an average decline of 0.2% (2).
The "sell in May" theory is even weaker in 2026 because it's the second year of President Donald Trump's term.
Looking at prior presidential cycles, the Bank of America found that the S&P 500 has a strong bullish bias during this period, with a 60% chance of positive price action in May.
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Data was even more positive for the tech-heavy Nasdaq 100, which posted May gains of at least 2% in nearly 70% of similar periods (3).
With all of these findings, Bank of America suggested changing Wall Street's classic rhyme to the far less catchy, "Buy in May and sell in July/August."
Is stock seasonality just a superstition?
Buying and selling stock solely based on the calendar may seem silly, but some statistics support aspects of the seasonal trend theory.
Most notably, there's a lot of evidence that shows September truly is the scariest month for stock investors.
RBC Wealth Management tracked the S&P 500's performance back to 1928 and found that there's an average September decline of roughly 1.2% (4).
A 1% drop may not seem like the end of the world, but it's the consistency of September slumps that makes it a deservedly detested month.
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Anyone holding stocks into September has a 55% chance of ending the month in the red.
RBC also noted that only one other month — February — had an average decline for the S&P 500. However, that drop was significantly lower than September's at a paltry -0.1% (5).
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Should seasonality be a part of your strategy?
There's no denying that there are interesting correlations between seasonal patterns and stock movements.
In the real world of finance, however, these findings are too small and inconsistent to make them a reliable trading model.
Seasonality as the "be-all-end-all" explanation for market behavior is far too simplistic to be a foolproof technique.
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After all, if it were so easy to "sell in May and go away," then everyone would be making money in the market.
Remember that even months with a "bad" reputation like September can be flat or even post gains, which means there's still a high degree of chance using seasonality to trade positions.
For investors, trading seasonal blips makes even less sense as they aren't likely to impact a diversified portfolio's long-term performance.
Although New York University Stern data shows the S&P 500 has plenty of green and red years, anyone who holds long enough tends to get an average annual return of 10% (6).
So, no matter the season, it's far less stressful to just stay put in long-term S&P 500 positions.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Business Insider (1),(2),(3); RBC Wealth Management (4),(5); New York University Stern School of Business (6)
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Eric Esposito is a freelance contributor on MoneyWise with an interest in financial markets, investing, and trading. In addition to MoneyWise, Eric’s work can be found on financial publications such as WallStreetZen and CoinDesk. When not researching the latest stock market trends, Eric enjoys biking, walking his dog, and spending time with family in Central Florida. Eric holds a BA in English from Quinnipiac University.
