Is 2025 a Year to 'Sell in May and Go Away'?

The old Wall Street adage, “Sell in May and go away,” has long been viewed with skepticism—but, in 2025, the strategy may deserve a closer look.

With the S&P 500 up 10% from its April 8 low and concerns rising over the lagging impact of the Trump administration’s aggressive tariff regime, financial advisors may view early May as a tactical window to rebalance client portfolios.  

While the strategy has produced mixed results historically, this year’s elevated equity valuations and growing economic headwinds—particularly trade-related risks—suggest that selectively trimming risk assets now could be prudent, especially for clients with shorter time horizons or greater income sensitivity.

What Is ‘Sell in May and Go Away’?

The sell in May and go away strategy is rooted in seasonal market tendencies. Historically, U.S. equities tend to underperform during the six months from May through October compared to the stronger performance seen from November through April.  

This anomaly has been documented in various studies dating back decades, with researchers finding that a majority of annual equity returns often occur in the winter and early spring months.

While not foolproof, data show that, since 1990, the S&P 500 has posted average returns of roughly 2% from May to October versus 7.5% from November to April. However, over more recent decades, the tactical strategy’s success rate is mixed, in part due to algorithmic trading and heightened investor awareness of seasonal biases.  

Sell in May: Pros and Cons for FAs

While the sell in May strategy has some short-term tactical merit, its inconsistency is worth noting. Here are some of the key pros and cons for financial advisors to consider.

Pros

• Risk Management: In a year like 2025, when macroeconomic uncertainty is heightened due to tariffs, a tactical reduction in equity exposure could protect portfolios from downside volatility.
• Client Conversations: This seasonal strategy can help advisors initiate proactive conversations about risk and market timing in a structured way.
• Realizing Gains: With equity markets significantly off their lows, advisors can lock in profits and reallocate capital to more defensive areas such as Treasury ETFs, defensive sectors or gold.

Cons

• Inconsistency: The strategy doesn’t work reliably every year. For long-term investors, market timing often underperforms a disciplined buy-and-hold approach.
• Client Skepticism: Some clients may view this as a gimmick or get confused by short-term tactical moves if they conflict with long-term plans.
• Reinvestment Risk: Exiting equities may leave portfolios in cash or low-yield assets during periods when markets unexpectedly rally.

Balancing Tactical Moves with Long-Term Conviction

The key for financial advisors is not to fully embrace or dismiss the sell in May tactical strategy, but rather to apply it within the broader framework of a client-focused portfolio.

Advisors can use this time to rebalance portfolios—perhaps trimming overextended equity positions and allocating to defensive sector ETFs more resilient to economic contraction, such as the Consumer Staples Select Sector SPDR Fund (XLP) or the Utilities Select Sector SPDR Fund (XLU).

Meanwhile, core holdings like broad-market ETFs, such as the Vanguard S&P 500 ETF (VOO) or the Schwab U.S. Dividend Equity ETF (SCHD), should remain in place for clients with long-term growth goals.

In summary, seasonality can serve as a useful lens but should never overshadow personalized financial planning. Advisors can add value by navigating short-term uncertainty with tactical positioning while anchoring portfolios to each client’s financial plan and risk tolerance.