The Seasonal 'Sell In May And Go Away ' Fails In 2009

This is just an example why seasonality factors may not be relied on.

According to Bloomberg,

``Global equity investors who follow the Wall Street axiom to “sell in May and go away” are missing out on the biggest gains in at least four decades.

``The MSCI World Index climbed 19 percent from May 1 through yesterday, the steepest advance for that period in the 23- country measure’s history stretching back to 1970, according to data compiled by Bloomberg.

``The CHART OF THE DAY tracks the MSCI World’s performance in May through July during the three years it climbed most before 2009, including the previous record gain of 15 percent in 1997. During the past decade, it posted an average loss of 3.1 percent in those three months, falling eight times, Bloomberg data show...

``The “sell in May” strategy was first noted in 1986 by the Stock Trader’s Almanac, which found that $10,000 invested in the Dow Jones Industrial Average from May 1 through Oct. 31 since 1950 left investors with a loss of $1,522. A $10,000 compounding investment in the U.S. benchmark from Nov. 1 to April 30 led to a gain of about $88,000, according to the Almanac, started by Yale Hirsch and now edited by his son Jeffrey Hirsch."

It would appear that presently, the impact from government policies has stronger bearing than simply relying on seasonal patterns.