Stock Market History on “Sell in May and Go Away” Adage



may

“Sell in May and go away” adage or also widely know as Halloween indicator, is the belief that the period from November to April has significantly stronger growth on average than the other months.

In such strategies, stocks are sold at the start of May and the proceeds held in bonds or a deposit account. Stocks are bought again in November, typically around Halloween.

How true is this to our stock market? The table below shows the historical data since 1988.

Year Change in FBM KLCI (%) Change in Dow Jones (%)
May to Oct Nov to Apr May Effect May to Oct Nov to Apr May Effect
1988/89 10.7 27.5 5.7 12.6
1989/90 7.7 9.5 9.4 0.4 X
1990/91 -5.5 19.7 -8.1 18.2
1991/92 -9.7 11.3 6.3 9.4
1992/93 8.4 12.2 -4 6.2
1993/94 35.1 8.5 X 7.4 0 X
1994/95 5.2 -14.2 X 6.2 10.6
1995/96 0.6 24.2 10 17.1
1996/97 -1.8 -7.5 X 8.3 16.2
1997/98 -38.5 -5.8 6.2 21.8
1998/99 -35.2 66.5 -5.2 25.6
1999/00 10.1 20.9 -0.5 0
2000/01 -16.3 -22.3 X 2.2 -2.2 X
2001/02 2.7 32.3 -15.5 9.6
2002/03 -16.9 -4.4 -15.6 1
2003/04 29.6 2.6 X 15.6 4.3 X
2004/05 2.7 2.1 X -1.9 1.6
2005/06 3.6 4.2 2.4 8.9
2006/07 4.1 33.8 6.3 8.1
2007/08 6.9 -9.5 X 6.6 -8 X
2008/09 -32.5 14.7 -27.3 -12.4
2009/10 25.5 7.5 X 18.9 14.6 X
Total 14 of 22 16 of 22


From historical data, we can see that it does has impact. What do you think about this year?


Leave a Comment

  • jack 27th April, 2010, 4:24 pm

    Holders sell, buyers buy, magic formula of success in tradings.

    Reply
  • Jayce 1st May, 2010, 11:47 am

    Drop. The index up too much already since last year. It’s time for correction. 😉

    Reply
  • ChampDog 3rd May, 2010, 11:47 pm

    Wow, got such thing? Thanks for the information…

    Reply