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Sell in July and go away

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February 7 2023

The old adage of “Sell in May and Go Away” has held up to the test of time well, if applied in bear markets. There is a good run up in mid-February to the end of April, before the proverbial sell in the beginning of May, but don’t go away, yet. Another strong run is indicated from early/mid-June through end of July; with July not to be missed in its entirety.

Two more statistically significant nuances can be gleaned from historical data:

  1. While there is considerable difference between bear vs bull markets, in both cases the first half of the year is better than the second (thanks in large part to May and the September).
  2. The time within the presidential election cycle matters.

The following is the seasonal cycle for the current position in the election cycle for both bull and bear markets over the last 56 years. The history (red) confirms that we are indeed in a mild bear market, and given considerable longer term demographic headwinds, the second half of 2023 promises to be a good time to take time off of risky (read, growth-oriented) assets entirely.