Sell in May and Go Away: What Actually Happens to Your Portfolio If You Do It Every Year

Start with the number that should settle the argument. What if you had $10,000 in 2000 and, every single year, you sold the S&P 500 at the start of May and bought it back on November 1? Twenty-five years of that discipline would have left you with about $38,407. What if you had ignored the whole thing and just held? The same $10,000 would be worth about $59,998. The famous seasonal trick cost you roughly $21,600, or more than two times your original stake, in foregone gains.

And here is the part that makes June 2026 a strange time to be reading this. Right now, you are living inside the trade. Anyone who sold this May is sitting in cash watching the market, which means this year's version of the experiment is happening in real time. We will come back to that at the end. First, the data.

What the Strategy Actually Says

"Sell in May and go away" is one of the oldest sayings on Wall Street, old enough that the original British version told you to come back on St. Leger's Day in September. The modern American rule is simpler: sell your stocks at the start of May, park the money in cash or short-term bonds through the summer, and buy back in on November 1. The idea is that the market does its real work in the cold months and mostly spins its wheels, or worse, from May through October.

It is not pure folklore. Academics gave it a respectable name, the Halloween indicator, and found the November-to-April stretch really has delivered stronger average returns than May-to-October across many decades and many countries. The pattern exists. The question this site cares about is whether you can actually pocket it.

Running the Numbers, 2000 to 2025

We took $10,000 and ran two investors side by side using monthly closing prices for SPY, the S&P 500 ETF. The buy-and-hold investor put the money in at the end of April 2000 and never touched it. The seasonal investor sat in cash every May through October and held the index every November through April, repeating that for 25 straight years, ending in April 2025. To keep the comparison clean, the cash earned nothing in the base case.

Both strategies made money. That is the honest starting point, and it is why the saying refuses to die. Sitting out the summer did not blow you up; it grew your money at a respectable 5.5% a year. It just grew it a lot slower than doing nothing, because two full percentage points of annualized return, compounded across 25 years, is the difference between $38,407 and $59,998.

The Years It Worked, and the Years It Backfired

Here is what the strategy made you skip. The table below shows the actual return of the S&P 500 during the May-to-October windows the seasonal investor sat out. Green is a summer you were right to dodge. Red is a rally you missed by hiding in cash.

The strategy's best moments are real and dramatic. Sitting out the summer of 2008 saved you from a 29.2% collapse. The summers of 2001 and 2002, deep in the dot-com unwind, fell 15.9% and 17.3%. If your goal is to avoid the worst summers in modern memory, the calendar did help.

But notice how lopsided the misses are. Across the 25 summers, the index rose in 19 of them. The seasonal investor spent most of his summers in cash watching stocks go up, including a +19.7% rip in 2009 off the financial crisis bottom, a +13.4% pandemic recovery in 2020, and a +14.0% run in 2024. Skipping a handful of brutal summers feels smart. Skipping three out of every four good ones is what quietly drains the account.

The Hidden Costs Nobody Quotes

The $38,407 figure is generous to the strategy, because it ignores three real-world frictions that only get worse in practice.

Taxes. In a regular taxable brokerage account, selling every May is a taxable event. Hold from November to April and you have held less than a year, so any gain is taxed as a short-term capital gain at your ordinary income rate, which for many investors runs 22% to 32%. Buy-and-hold pays nothing until you sell, and then at the lower long-term rate. The seasonal investor hands the IRS a slice of the pie every single year, and that slice never gets to compound again.

Missed dividends. The S&P 500 pays dividends across the summer, and a company does not skip its July payout because a trader decided to sit in cash. Roughly half the index's annual dividend lands in the May-to-October window you are sitting out. Over 25 years of forfeited summer payouts, that is real money the table above does not even count.

Reinvestment timing risk. "Buy back November 1" sounds precise, but you are making a fresh entry decision 25 times. Some Novembers you buy back higher than you sold, locking in the gap. And the whole plan assumes you actually pull the trigger every November, in years like 2008 when buying stocks felt insane. The strategy that looks mechanical on a spreadsheet asks for real nerve at the exact moments nerve is hardest.

The Verdict

Does the seasonal pattern exist in the data? Weakly, yes. Over these 25 years the average November-to-April stretch returned +6.0%, while the average May-to-October stretch returned just +2.4%. Winter really did beat summer. That is not nothing, and it is why the saying has survived a century.

Is it exploitable after costs? For almost everyone, no. The catch is that summer averaged +2.4%, not a loss. A positive number is not something you want to sit out. An investor who did the exact opposite, holding stocks only in the summers and cash all winter, still turned $10,000 into $15,622, because the market drifts up over time no matter which six months you pick. Once you layer on annual short-term taxes, forfeited dividends, and 25 chances to misjudge your re-entry, the thin seasonal edge gets eaten alive. The pattern is real. The profit, for a normal taxable investor, is not.

Why 2026 Is a Live Test

This year is a genuinely interesting one to ask the question, because the setup looks tailor-made for the bears. Markets are still digesting the aftershocks of the April 2025 Liberation Day tariff shock, spring 2026 delivered a real scare when the S&P 500 dropped from $684 in February to $649 in March, and the financial press spent late April running its annual "should you sell in May" cycle alongside headlines about ETF outflows. If ever there was a year the seasonal crowd felt vindicated walking into summer, this was it. So how is the 2026 trade doing barely a month in? The market recovered 10.8% in April to close at $718.66, which is right where a sell-in-May investor cashed out. As of the latest monthly close the S&P 500 sits at $756.70. The seasonal investor is already behind by about 5.3%, with most of the summer still to run. It is one month and it proves nothing, but it is a fitting reminder of why the rule is so hard to profit from: the market does not read the calendar.

If you want to pressure-test a seasonal plan against simply staying put, the more durable lesson is in what happens when you never panic sold and what $1,000 in the S&P 500 would be worth across different start years. You can also run any entry and exit date yourself in the calculator.