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Sell In May And Go Away, Except In Year With An Election

BySteven Goldstein
Published 08/08/2012, 02:59 AM
Updated 07/09/2023, 06:31 AM

As the S&P 500 knocks on the door of 1400, its hard to believe that it is only 2 months since the S&P 500 made a loss of 1266, that is a quite awesome 10%+ gain since that low as of last night's close.

In light of this it is interesting to re-visit a post from the 20th June. - The post was entitled ' Sell in May and go away – Except in year with an Election day!' which can be seen here. At the time I alluded to a comment from Bank of America Merrill Lynch analyst Stephen Suttmeier, who pointed out that 'On average, the April-May period is the weakest two-month period for the Presidential election year and this is followed by the strongest three-month period in June-August. I also include a couple of charts from Barry Ritholz's Big Picture blog which can be seen below, and which highlighted how this has played out on average in the past.
S&P 500 Total Return By Month - 1981 Through 2011

S&P 500 Total Return By Month - 1926 Through 2011 - Election Year Only
The next chart is an update of the monthly performance for this year to date into last nights close. It certainly seems to be playing out true to form for an election year thus far, though this does not bode too well for the stock market next month.
S&P 500 Total Return By Month 2012 To 6th August 2012

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