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Looking Ahead: Is ‘Sell in May’ Simply a Myth?

May 3, 2026

Futures and options traders were on the NYSE American floor of the New York Stock Exchange in New York City on April 17, 2026.

Brendan McDiarmid | Reuters

Conventional wisdom can be quite persistent.

As May trading gets underway this week, investors are grappling with the old adage of “sell in May and walk away.” This strategy suggests selling stocks in May and jumping back into the market in November to sidestep the typically low summer returns in the Northern Hemisphere.

Test traditional trading

At this moment, prevalent beliefs and traditional trading strategies are under scrutiny.

If investors decide to sell now, they might miss out on potential profits even after April is behind us. Notably, European stocks have recently marked their best performances, with the Italy FTSE MIB seeing a near 9% gain, its strongest month since January 2023. Meanwhile, the S&P 500 and Nasdaq also had their best monthly performance in about six years. Much of this can be attributed to changes spurred by the Trump administration. Interestingly, global stock markets have shown remarkable resilience amidst the Middle Eastern turmoil, leading to speculations that a resolution could further buoy stock prices this spring.

In fact, those who opted to sell in May in previous years might have overlooked a rally. JPMorgan’s trading team indicated that over the past decade, the average return for the S&P 500 was 1.5% in May and 1.9% in June, with July bringing an even better average of 3.4%.

Do you like stocks in the summer?

Deutsche Bank has analyzed how the “sell in May” strategy might play out in Europe. For the Stoxx 600, they found that in 25 out of 39 years, this strategy underperformed a straightforward buy-and-hold approach, showing no statistical edge.

This May, investors might want to stay active, as European companies are poised to release significant gains in the coming weeks. Major banks like Unicredit, HSBC, and Commerzbank are all set to announce their earnings soon, alongside giants in the energy and pharmaceuticals sectors like Shell and Novo Nordisk.

Risk factors

However, despite the surging global stocks, there are warning signs. Central banks in the U.S. and Europe are adopting cautious positions. Federal Reserve Chair Jerome Powell mentioned that “inflation remains elevated,” while ECB President Christine Lagarde stated that the bank is closely observing “the impact of negative supply shocks.” The Bank of England has also raised concern over a grim inflation forecast.

Amid these influencing factors, investors now face the choice of sticking with traditional trading methods or exploring alternative strategies. Still, as Deutsche Bank notes, a “sell in May” approach offers just about as much certainty as flipping a coin.