May's stock market history
Bottom Line: For years I've cautioned against the old saying, "sell in May and go away". That saying, which was taken by some as being conventional wisdom, has proven to be anything but overtime. In fact, May's actually been a pretty decent performer over time.
Since 1950 here's the scorecard:
Positive years: 40
Negative years: 28
Average rate of return...+.16%
On average stocks are higher 59% of the time this month and, in fact, we haven't had a negative May since 2012. The average overall performance of the month isn't great, May ranks 8th out of the 12 months for average performance, but it certainly hasn't been a month negative enough to justify the outdated saying. In fact, historically it's been a lot less volatile than other months.
The best May was in 1990 with an 9.2% return and the worst was in 1962 with an 8.6% loss. We won't know what this May holds until we're done with it but with record earnings growth and a strong economy the fundamentals of companies are well positioned for the future.