Fisher Investments’ Founder, Ken Fisher, Debunks: “Sell in May and Go Away”

A Man appears on the screen wearing a navy suit, sitting on a chair, behind him is a white screen with the title “Debunkery” 

He begins to speak.

Ken Fisher: Any of these things that people want to push at you, like "sell in May go away" or the market's going to be up in the next year because it was up in January to be down in the next year because it was down in January.

Work sometimes and just enough of the time to make people sometimes kind of want to really sort of maybe, if believe it.

On the white screen a title appears “DEBUNKERY” with subtitle “Seeing Through Wall Street’s Money-Killing Myths”

Ken Fisher appears back again in the same position.

Ken Fisher doing hand gestures with a book in his hands time to time explaining. The books is called “Debunkery”.

Ken Fisher: So, every year about this time you get a certain amount of cacophony aimed at the concept, which is very

old but false, called "sell in May, go away".

Now, as you probably know, pretty much every month we take one topic from my book, Debunkery, and

we go through some common thing that people say a lot, which is basically a false thing and you shouldn't use even though people will say it.

So, this month, being May, you're likely to hear a certain amount of sell in May, go away.

And the concept behind this derives from the notion that the period between May and September or October, depending on who you talk to, is supposed to be an exceptionally weak period in the stock market.

And that you'll do.

better if you own stocks from September, October sometime,

one of them there until the next May, and then don't own them between. Sell in May, go away.

Now, I'm just going to tell you that

this has a lot to do with football.

Now, I'm not opposed to football, and I'm not opposed to a month.

I wouldn't be a very good football player myself.

I played football a little bit when I was a little kid and I got tackled a lot.

But I'm going to tackle this one.

Ken Fisher: The fact is there's a lot of these things.

Like in my Wall Street Waltz book, I wrote a chapter on the legendary Super Bowl indicator that the team that wins the Super Bowl, depending on which team it is, is supposed

to indicate whether the stock market goes up or down based on the league the team comes from.

You can see how ridiculous that is.

You can see how that's such a silly concept.

But so are all of the other concepts

that have things like day of the week.

I mean, there's people that have days of the week, they think you should sell on this day, buy on that day on a regular basis.

Statistically, that's ridiculous.

There's a so-called January feature where if January is up, supposedly so is the market for the year.

Ken Fisher: Well, mind you, if January is up, the year is more likely to be up than down because you got one out

of twelve up and it's a head start, right? But if you actually look at the twelve months starting January 1st moving forward, it's easy to see that it's perfectly random.

Every month, however, will have a little higher or lower than average return by definition, just as the

same is true of a group of people.

Some will be a little taller than

an average, some a little shorter, some a little skinnier, some a little heavier.

Doesn't tell you anything about the average human condition that you would get out of all the people in that same way.

May does have a slightly below average long-term history made up for by a very few months.

Mays in a very few years.

Excuse me.

It is also true that September is a

month that on average has a slightly negative history but made up of four particular September.

You take those out, the rest of it's positive.

If you actually take the aggregate return of June, July, August they're actually above average.

And the whole period from May

to September is a positive return.

From May to October is a positive return.

On the screen behind Ken Fisher a table appears, the table is showing average stock returns by month

Ken Fisher: And you get all those in the book listed,

I'm not trying to hawk the book at you, get old copy if you want used for about 15 cents,

but the fact is you can see this statistically.

Any of these things that people want to push at you like sell in May go away or the market is going to be up in the next year because it was up in January, it's going to be down in the next year because it was down in January.

Work sometimes and just enough of the time to make people sometimes kind of want to really sort of maybe if believe it.

But the reality is they work about the same percentage of the time that the market's normally up or normally down. About two thirds of the time

it's up, about two thirds of the time it's down.

On the screen behind fisher, a chart appears, this chart is showing a Hypothetical Growth of $100.000; Full year vs. Sell in may returns.

Ken Fisher: Sell in May works about a third

of the time. Last year in 2022,

January is down and the year is down.

It worked then.

But, oh, by the way, sell in May go

away didn't really help you much because a lot of the decline was before you got to May.

And most years it just varies by the year consistent with the fact that the market tends to be up about two

thirds of the time down about two thirds of the time.

And there's nothing magic despite what people may tell you about the calendar year.

Let me take a moment on that, if I may.

Ken Fisher: People don't think about this. We, you, me, everybody else comes from a background that used to be a long, long, long time ago before our time overwhelmingly agricultural.

When my grandfather was a boy born in 1875 in San Francisco most of American labor was agricultural.

Today, one and a half percent

of American labor is agricultural.

We don't really have a heavily agricultural society.

We consume agricultural products.

We use agricultural products like lumber.

But the reality is the calendar is really important if you think about what you do relative to agriculture.

If you want to go hunting the

calendar has some features that are important.

Ken Fisher: But if you're making chlorine or you're creating semiconductor chips, or you're in the service business, which is the economy is mostly service business today.

But if you're just in the manufacturing business of most

things, the calendar doesn't really so much fit in.

But we still have this calendar, and

people get overwhelmingly fixated on calendar events.

And as it relates to the stock market,

you can run statistical tests to tell if

something like Sell in May goes away.

And you know what?

None of them work.

That's the point that I'm wanting you to see.

All these end up being myths that should be debunked.

And the best thing to do with a myth

that should be debunked is throw it away.

Thanks for listening to me.

A half white/half red screen appears.

Ken Fisher: I very much hope you enjoyed this video as part of my series on debunking Common Market myths.

To watch more videos like this, click the link on the screen and make sure to subscribe to Fisher Investments YouTube channel.

Thanks so much for listening to me.

Ken Fisher finished talking, and

a series of disclosures appears on screen: “Investing is Securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice or a reflection of the performance of Fisher Investments or its clients. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.

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