Why it still pays to stay away
May has arrived, which means it?s time for City gents to swap their bowler hats for boaters, and head to the English countryside for summer sporting events. Or was that just the way it was before Big Bang?
Apparently not. The old phrase ?sell in May, go away, return again on Leger day? (the St Leger is the final classic of the English flat-racing season, in mid-September), has been proved to be more than just folklore. According to research by stocks and shares website ADVFN, if you?d followed the adage over the past 20 years, you could have increased your FTSE 100 returns by a staggering 55%. The theory is that while City gents are away for the summer there will be more sellers of shares than buyers, meaning prices must fall.
?Considering the saying comes from the age of top hats, jobbers on the floor of the stock exchange and orders placed via the telegraph operator, it seems peculiar that it can still hold true,? says Clem Chambers, CEO of ADVFN. ?Yet, despite living in an era of international global capitalism, automated trading and hedge fund arbitraging, the research shows that amazingly it does.?