Claire Corlett

Fish Food, Fish Tanks, and More
Why “Sell in May” is a Myth | Ken Fisher | Fisher Investments [2019]

Why “Sell in May” is a Myth | Ken Fisher | Fisher Investments [2019]


“Sell in May, go away” is an age-old myth that derives from a concept
that really, kind of started in the 1920s, but if you actually look at the numbers,
you know it’s a myth because regardless of whether you start on
May 1, May 30, May 15… it doesn’t really matter… and end-to-end September, or October sometime,
doesn’t really matter– the average returns in history
for the S&P 500 in those periods are almost exactly half of the returns
of the other half of the year or the other part of the year,
depending on how you measure it. And they’re still positive. So, “selling and going away”
doesn’t really work because you miss positiveness even though it’s less positive
than the other half of the year. Now, thinking about it another way,
that’s based on averages, and averages aren’t what you get. You get what you get
and as my grandchildren would say, “you don’t throw a fit.” And the fact of the matter is that
when you look at those averages, those returns in that May to fall period
are also somewhat brought down by a few extreme periods in that
total series from 1925 to present, where the spread between that period
and the rest of the year was extraordinary. And when you have a few
that pull the averages, that misleads you. “Sell in May, go away” is a myth
because it doesn’t work. The fundamental feature between
May and September or May and October is that on average,
you get positive returns.

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