Now that June is here and the tariff war fiasco has faded (a little), I thought I’d take a light hearted look at one of the oldest sayings in the investment world:
“Sell in May and go away, come back on St Leger Day.”
This old adage has its roots right here in Doncaster. The St Leger Stakes, first run in my home town in 1776, was the final event of the social and sporting summer season.
In 19th-century Britain, the social elite would begin their season in May at Newmarket and end it in Doncaster with the St Leger. With so many of these ‘elite’ being the investors of the day and, subsequently being ‘on the move’ during the racing season, business slowed during the summer months and investment activity tended to follow suit.
So the essence of the saying is: avoid the markets in summer and return in September once the action resumes.
But is there any truth to it today?
Well the investment company, 7IM, decided to take a look and, using the FTSE 100 as the basis, you will see that the numbers tell a different story!
If you’d followed this strategy over the past 20 years—selling out of the FTSE 100 at the end of April and buying back in after the St Leger in September—you’d be significantly worse off. In fact, roughly100 percent worse off than if you had simply stayed invested throughout the year.
There are two reasons for this.
First, being out of the market for over a third of the year means missing out on a lot of potential growth. In bad years, such as 2008, it might appear to work in your favour. But in recovery years, like 2009 or 2020, you’d miss substantial gains by sitting on the sidelines.
Second, the idea that summer is a poor time for investing simply doesn’t hold up anymore. Global markets now move based on data, economic policy, and corporate performance—not seasonal holidays or racing calendars. Some of the best market returns in recent history have come during the summer months.
Investing Is Not About Catchy Rhymes
The notion of timing the market based on tradition or seasonality might sound tempting, especially when wrapped in a bit of heritage. But investing is not horse racing. The data shows that trying to jump in and out of markets based on the calendar is far more likely to harm your long-term returns than help them.
Real success comes from staying invested, having a clear plan, and riding out the ups and downs with a diversified strategy built around your goals.
As we move from the end of May through to September, a time traditionally associated with quieter markets, it’s worth remembering that your portfolio is designed to work all year round. Pulling out for a season rarely pays off, and in most cases, it’s time—not timing—that builds real wealth.
