There is one well-known and popular trading adage “Sell in May and Go Away”, which suggests that investors might want to avoid investing in the stock market this month due to seasonality. According to this investment saying, the U.S. stock market underperforms during the summer months (from May to October end).
While the historical underperformance is a point to be noted, a new research from a U.S. equity strategist at S&P Capital IQ indicates that it might be foolish to quit the stock market altogether. Rather, investors could rotate into the defensive sectors during this soft six-month period (read: These Smart-Beta ETFs Survive Market Volatility).
