Share Prices & Company Research

Press Release

09 September 2016

Does it pay to always 'Sell in May...'?

‘Sell in May and go away, come on back on St. Leger's Day’ is a well-known stock market adage. The meaning behind the phrase is that, to avoid usually weaker equity markets over the Summer, investors should sell holdings and come back to the market again in the Autumn.

There have been many studies and analyses around the ‘Sell in May’ theory. Historical analysis has found that, generally, the markets do tend to underperform between May and October, compared to November to April. This doesn’t just occur in the UK, but is a phenomenon that seems to affect markets worldwide. However, although there is some foundation to ‘Sell in May’, it is not the case every single year. A study looking at the performance of the FTSE All-Share index from 1986 to 2014 between May and September showed positive returns could be found in 19 out of the past 29 years.

Although we can accept that there is a seasonal trend, it can be concluded that it doesn’t always pay to sell in May. There are certainly other factors than the season to consider. Getting your timing right for when you leave and return to the market is an issue, as are factors such as the potential of missing out on dividend payments and potential tax implications.

So did the ‘Sell in May’ adage ring true this year?
Perhaps not, least of all because of the market’s reaction to the EU referendum result. Bargain hunters were able to take advantage of buying opportunities that opened up in the wake of the leave vote, making this Summer an unseasonably active period. Although on the morning of the referendum result there was some panic in the markets, since 27th June the FTSE 100 has been steadily climbing, and is currently trading higher than at the beginning of May.

Getting back in the saddle.
Whether you took a break from investing, or have been dipping your toes in over the Summer, we have collated six St Leger day investment ideas that will hopefully spur you on your investment journey.

If you would be interested in receiving investment ideas on a regular basis you may wish to subscribe to our ‘Monthly investment ideas’ publication. This is produced by our Investment Support team and includes commentary on FTSE 100 & 250 companies, smaller cap stocks, fixed interest and unit & investment trusts.

If you would like to subscribe to this FREE publication then please e-mail 

with ‘Investment ideas’ in the subject line. Please include your name, postcode and account number in the body of the e-mail. Alternatively please call us on 0113 200 6470.

Please follow the link if you would like to view all of our St Leger Day investment ideas, two of which are presented below.

Prudential is an international financial services group with operations in Asia, the US and the UK. The fact that the group does have significant overseas operations should help shield it from the impacts of a potential slowdown in the UK economy as a result of leaving the European Union. Net profit rose to £2.58bn in 2015, enabling the group to increase its full-year ordinary dividend by 5 per cent to 38.78p per share, as well as declare a special dividend of 10p. The group was boosted by a good performance in its Asia life and asset management arm, which saw its operating profit rise from £1.14bn to £1.32bn. Its US and UK operations also witnessed double-digit growth. Chief executive Mike Wells said the group is well positioned to adapt to macroeconomic uncertainty due to the group’s “growing level of recurring income” and “robust balance sheet position”.

Laird is engaged in the development and supply of communications technology that protect electronic devices from electromagnetic interference and heat. The group reported a fall in pre-tax profit in the first half of the year to £6.2m due to challenges it experienced in its Novero and WACS businesses. However, despite this the majority of the group’s business performed as anticipated. Consequently, revenue in the half grew from £305.9m to £352.5m and the group signalled its confidence by raising its interim dividend from 4.40p to 4.53p per share. Furthermore, the group said its expectations for 2016 were “broadly unchanged”, with performance weighted to the second half and boosted by currency tailwinds.

Please remember investments and income arising from them can fall as well as rise in value and you may get back less than you originally invested. Past performance and forecasts are not reliable indicators of future results and performance. Our views do not constitute a recommendation to buy or sell any of the investments mentioned.

Does it pay to always 'Sell in May...'?
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