“Sell in May”? Why Global Investors Should Think Twice in Today’s Market

May 13 – Vietnam Insider – As May unfolds, so does one of the most persistent maxims in financial circles: “Sell in May and go away.” A phrase steeped in tradition and whispered across trading floors for decades, it warns investors to exit the market during summer’s lull and return in September. But in a world of 24/7 trading and cross-border capital flows, is this old adage still relevant for modern investors?

The Origin: A Gentleman’s Summer Tradition

The phrase originates from 19th-century London, in its full form: “Sell in May and go away; come back on St. Leger’s Day.” This reflected the seasonal rhythm of Britain’s upper-class investors who would retreat from London to the countryside during the summer, returning only in September for the St. Leger Stakes horse race.

When the mantra crossed the Atlantic to Wall Street, it was simplified—but the sentiment remained. Summer trading volumes would dwindle as fund managers decamped to the Hamptons, leading to what traders dubbed the “summer doldrums.” Historically, this period saw weaker returns, with July and August often underperforming relative to other months.

The New Market Reality

But times have changed. As ROX Capital points out in its latest report, the seasonal effect has lost its power in today’s globalized and digitized markets. Despite the saying’s popularity, data shows that 74% of “May to September” periods over the past decades have actually posted positive returns, averaging a 4.2% gain.

So what’s driving the shift?

• Electronic trading and automated fund flows ensure constant liquidity.
• Global investors don’t take the summer off anymore.
• Macroeconomic events now have far more influence than seasonal patterns.

From the 2008 financial crisis to COVID-19 and the era of stimulus-fueled recoveries, markets have shown time and again that opportunity can arise in any season. Summer 2020, for example, marked one of the strongest rallies in recent memory, as stimulus packages revived global equity markets.

Beware of Nostalgia Investing

Duong Ngoc Dung, Deputy CEO of ROX Capital, cautions investors against relying on seasonal clichés. “Some of the strongest gains happen right after major declines. If you’re out of the market waiting for September, you might miss the recovery,” he says.
Indeed, modern investing requires more than just following calendar-based folklore. It demands close attention to macroeconomic indicators; policy shifts, earnings cycles, valuation and momentum signals

Blindly following “Sell in May” today may lead investors to miss golden opportunities, particularly in volatile and fast-moving environments.

Adaptation Over Tradition

In a market driven by AI trading algorithms, real-time news, and global geopolitics, static investment strategies are being replaced by agile, data-driven decision making.

“Sell in May” may still hold nostalgic value, but as an investment strategy, it belongs more in the archives of financial folklore than in the modern investor’s playbook. As Vietnam continues to attract international capital and integrate deeper into global markets, understanding the pulse of the economy matters more than ever.

Bottom line for investors? The market doesn’t pause for summer anymore. Instead of walking away, stay informed, stay flexible, and stay invested—because the best opportunities may come when others are looking the other way.

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Source: Vietnam Insider