Sell in May Strategy

Anyone tried this?

https://www.ii.co.uk/analysis-commentary/wilds-winter-portfolios-are-back-2021-22-ii521732

Might be good fodder for the podcast @Donaldo_Duckarelli.


Investors try to squeeze insights out of data and shape it into a story, often without causation. This causes patterns to either persist or break, often without reason. Investors tend to enjoy a good slogan as well; the “January Effect” and “Sell in May and Go Away” are two of them. While both have proven successful at forecasting market patterns, the hook is that they aren’t actionable.
Putting actual money to work behind these patterns is a fool’s errand that can cost millions.

Simalar goes for January
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Thanks @Etypsyno, although I think the strategy documented in the link I shared is based on a basket of 5 stock picks, so the investors are using their DD and analysis to focus on a specific subset they expect to show good growth over the term and compare the two strategies based on the selection, rather than the index.

It’s also grounded in the UK markets.

But you do raise a good counter argument for the tried and true buy and hold the index.

They’ve now revealed their picks for the project;

https://www.ii.co.uk/analysis-commentary/wilds-winter-portfolios-2021-winners-revealed-ii521823?utm_source=newsletter&utm_medium=email&utm_campaign=NEW-DLY-ENGAGE-ii_afternoon_round_up_291021%20(1)&utm_content=newsletter&spMailingID=15961419&spUserID=Mzc3ODg1NTQ3MDk4S0&spJobID=1857949058&spReportId=MTg1Nzk0OTA1OAS2

Also the Santa Claus Rally:

The Santa Claus Rally, January Effect, Sell in May, have some reality-based evidences, holidays (Christmas, New Year; Summer holidays, that provoke less liquidity in the markets, becoming more sensible to smaller movements, including pumps & dumps, selloffs, fear/nervousness), tax-loss harvesting (end of the fiscal year), portfolio modifications/recreation/creation (after the tax-loss harvesting).

It doesn’t mean that they always happen each year. Or at least, with high visibility. Also other variables can influence that seasonal effects, for good or bad. :wink:

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