May’s Market Dance: A Quick Look
How the Big Dogs Move in May
When the calendar flips to May, investors often hope for a warm welcome. The S&P 500 and Nasdaq 100 usually tip skyward, while the NYSE Composite keeps things a touch cooler—just a smidge.
- The S&P 500: Up in 15 out of 20 years (about 75%). Its average gain? A modest 0.4 %.
- The Nasdaq 100: Gains in 13 of 20 years (65%). Average climb tops out at 1.6 %.
- The NYSE Composite: Surges in 14 of 20 years (70%), yet its -0.4 % average wink tells the story it’s not always the party‑goer.
So, what does that all mean? There’s a classic saying in the trading world: “Sell in May and go away.” It’s a nod to the traditional dip that can appear from May through September. If you follow that mantra, you might miss out on a shining month—especially July!
Take a Refreshing 10‑Year Turnaround
The last decade has painted a brighter picture. The S&P 500 moved higher in 9 out of 10 years—a full 90 % streak—and its average gain climbed to 0.9 %. Casual investors, maybe time to stay in the game!
Get the Visual: The SPDR S&P 500 ETF in May
Want a quick snapshot? StockCharts shows the SPDR S&P 500 ETF’s May performance over the last 20 years, as well as figures for other months. It’s a handy visual reminder of how the market’s rhythm shifts with the seasons.
Small-capitalization stocks, tracked by the Russell 2000 index, have averaged a gain of 0.6% in May, moving up 65% of the time over the last 20 years. Over the last 10 years, the statistics are slightly better, with a 0.8% average gain, moving up 70% of the time in May.
How the stock market, or any other asset, performs at certain times of the year is called seasonality. Seasonality is backward-looking as it studies prior performance. Such patterns may continue into the future, or they may not. The historical stock market performance for May doesn’t necessarily provide insight into how stocks will behave this May.
More often than not, stocks have moved up in May, especially large-capitalization stocks associated with the S&P 500.
The Nasdaq 100 doesn’t move up as often, but the average gain for the month is bigger.
The NYSE Composite, which is more representative of the “average” stock out there, also moves up most years, but the average return is negative because the down years have been bigger than the up years.
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