Summer portfolio (and Sell in May) – update 2026

I first wrote about the "Sell in May" phenomenon a decade ago in 2016  in my article "Should you sell in May and go away". The adage states that you "Sell in May and go away and don't come back till St. Leger Day", in other words, sell out of the stock market in May and stay in cash over the summer, before going back in at the start of September when the St Leger Stakes horse race is run. The theory is that by doing so you avoid the more volatile summer months, which historically have also tended to underperform the rest of the year. A study published in 2002 found evidence of the effect in the UK going back as far as 1694. In addition, the Sell in May effect was present in 36 out of 37 countries that the study looked at with it being strongest in European markets.

But does the evidence still hold, nearly 25 years later and in the modern world of online trading, and can it be used to an investor's advantage?

The effectiveness of the " Sell in May" adage in the UK

If we crunch the numbers, the last time Sell in May worked in the UK was in 2022 (as shown in my chart below). The red line is the average performance of a fund from the UK All Companies sector, while the blue line is the Sell in May approach, where you move into cash during the summer. 2022 was a year when investment markets were impacted by Russia's invasion of Ukraine, which sparked an energy crisis that ultimately caused a surge in inflation and global interest rates. Coincidentally, this sounds very similar to where we find ourselves today, as a result of the ongoing war in the Middle East.

Interestingly, if you had continued implementing the Sell in May approach since 2022, you would be marginally up and endured much less volatility. This is despite the Sell in May approach massively underperforming in 2025 when stock markets rebounded following President Trump's U-turn on trade tariffs.

So does that mean the Sell in May adage works? The reality is that the above is just a snapshot in time. In reality, evidence increasingly shows that the power of the investment adage has waned. Research from Bestinvest covering the past 50 years (1976–2025) reveals that while the UK market has shown some historical summer weakness, selling is far from a foolproof strategy. Looking solely at capital returns, the MSCI United Kingdom Index dropped during the summer months in 24 of the past 50 years (48% of the time). However, this ignores a vital component of British equities: dividends. When dividend payouts are factored in, the number of loss-making summers plummets to just 17 years (34%).

Furthermore, while there have been nine severe summer market corrections (drops of 10% or more) over the past five decades, the 2020s have yet to see one. Exiting the market also means you risk missing a "soaring summer" such as those shown in the chart below. Over the same 50-year period, the UK market delivered returns exceeding 10% (including dividends) a total of 10 times. Statistically, your chances of missing a bumper summer rally are broadly similar to your chances of dodging a sharp downturn.

Over the long term, missing the strongest summers detracts from portfolio returns to a greater degree than missing summer slumps can boost them. The chart below shows my analysis of what would have happened if you followed a Sell in May approach every year since 1992, whereby you move in and out of cash and UK equities. Ultimately, it would have been far better to have remained invested over the entire period, although of course the Sell in May approach would have had a lower level of volatility. Again, as you can see, 2025 had a huge impact on determining the ultimate winner

The Global Picture: The adage completely breaks down

For modern investors who hold globally diversified portfolios, the argument for following a "Sell in May" strategy looks even weaker. Over the last 50 years, the MSCI World Index saw summer capital declines only 32% of the time (16 out of 50 years). Sharp global summer corrections are also incredibly rare, occurring just four times for the broader global market and three times for the US market. Conversely, strong summer gains are a regular occurrence: the S&P 500 has surged by 10% or more during the summer in 15 out of the last 50 years (a 30% hit rate), as shown below.

The surprising Trump effect

Analysis from IG highlights that the "Sell in May" philosophy is less effective in the US, but this is especially true during the Trump era. Data shows that the S&P 500 has historically delivered impressive average gains of 9.5% between May and October during a Donald Trump presidency, massively outperforming the sluggish 1.3% average seen during non-Trump years over the past two decades.

In summary, while UK equities have adhered slightly more to the tendency for summer weakness, there has been little long-term benefit gained from following the Sell in May strategy. Furthermore, US and global markets appear to actively reward risk-takers who stay invested through the warmer months.

"Sell in May" alternative  - the Defensive Sell in May strategy

Just before the summer of 2021, I explored the concept of building a Summer portfolio, where, rather than disinvesting into cash over the summer months, you move into defensive assets. You can read this research in full in my article "Summer portfolio & Sell in May". At the time, the best candidate for the asset class which could be used during the summer months, instead of cash, to create a defensive version of the Sell in May strategy was UK Gilts.

The updated chart below shows how the strong long-term outperformance of this Defensive Sell in May portfolio since 1992 remains.

However, the chart below shows the performance of the Defensive strategy over the four years mentioned earlier, versus remaining in the market or the traditional Sell in May approach, which uses cash. Unfortunately, the performance was poor and the level of portfolio volatility wasn't much improved by investing in Gilts during the summer.

Conclusion: Should you sell in May?

Ultimately, the traditional calendar-based "Sell in May and go away" strategy is increasingly too simplistic an instrument for modern investors. The data shows that completely exiting to cash risks missing out on soaring summer rallies, which occur just as frequently as summer slumps. Furthermore, dodging a summer slump rarely compensates for missing out on a major summer rally. While using alternative assets other than cash can boost the long-term performance, it risks short-term slumps.

Given the current macroeconomic backdrop, with global equities sitting at all-time highs driven by a narrow band of stocks, gilt yields at multi-decade highs and geopolitical tensions echoing the inflation-triggering shocks of 2022, will the adage have a good year in 2026?

While the adage may be unreliable, it does serve one purpose, which is to cause investors to pause and consider the level of risk they are taking within their portfolios as well as the asset allocation.