History Repeating

“Sell in May and Go Away” is so far in full swing as global volatility churns.

Words by
Frederic Ruffy

You can’t accuse Wall Street of burying its past. The old adage of “sell in May and go away” has been apropos so far in 2012. Some market watchers believe the equity market typically underperforms from May to November and for that reason, some market-timers advocate liquidating stock holdings in May before what they consider the historically volatile summer and early fall.

The pattern rings true so far this year. The S&P 500 shed 6% as it declined in 11 of the month’s first 15 trading sessions. Headlines may be doing little to convince markets otherwise: Spain partially nationalized a major bank as bond yields spiked; the Greek parliament splintered; Chinese data stirred fresh questions about its economic strength; and some U.S. earnings missed their mark.