Seasonal investing is far from a sure thing

Article Excerpt

Over the long run, stocks tend to perform statistically better during certain times of the year, with some degree of predictability. Seasonal investing is a strategy that attempts to exploit these market patterns. Sell in May and go away? You may have heard that investors should “Sell in May and go away.” This would have been good advice in the past half century or so, if you followed it every year without exception. In total, the market made most of its progress in those years during the periods between October and May. The remainder of the year has a much less profitable record. Sometimes, of course, the market went sideways or rose between May and October. Sometimes it dropped. But the totals do show October through May as much more profitable than May through October. One common explanation for this pattern rests on psychological speculation. Everything looks bright and hopeful in the spring, the theory goes, due to budding flowers, improving weather and so…