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Adam Milton

Sell In May, and ...

By , About.com Guide   May 6, 2009

One of the most well known trading related sayings is "Sell in May, and go away". The idea behind this saying is that stock indicies (and individual stocks) tend to move down from May until September, so it is a good idea to exit your positions in May, and then wait until September before entering any new positions. However, as with most well known things in trading, this is not necessarily a good idea.

The problem with the saying is not the "Sell in May" part, but the "go away" part. If stock indicies (and individual stocks) have a tendency to move down during the Summer, a better thing to do would be to enter a new short postion in May, and then hold the position until September.

I have not analyzed the price movements of stock indicies (or individual stocks) during the Summer, so I am not suggesting that you immediately enter a new short position. What I am suggesting is that you consider entering a new short position as an alternative to the "go away" part of the saying, and perhaps you can make a profit this summer, instead of breaking even or making a loss.

Just something to think about ...

Comments
May 6, 2009 at 10:18 am
(1) DM :

“I have not analyzed the price movements of stock indicies (or individual stocks) during the Summer,. . .”

Three paragraphs to basically say, I don’t know.

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