Key points:

• Seasonal patterns exist, but they are not reliable enough to run a long-term portfolio.

• Staying invested usually beats jumping in and out based on the calendar.

• May is a useful reminder to review risk, not to abandon discipline.

Every May, investors meet the same old market rhyme: “sell in May and go away”. It sounds tidy, decisive and pleasantly lazy. Sell now, enjoy the summer, come back when markets behave again. Sadly, markets did not receive the memo.

The saying has some history behind it. The original British version told investors to sell in May and return around St Leger’s Day, a famous horse race in September. It came from a world where wealthy investors left London for the countryside and market activity slowed. A charming image, but not exactly a robust investment process for 2026.

This year, the question feels especially tempting. The Standard and Poor’s 500 (S&P 500) closed at a fresh record high. That came despite high oil prices, geopolitical tension around the United States and Iran, and a market still heavily supported by artificial intelligence (AI) enthusiasm.

So, after a strong run, should investors take the seasonal hint and step away? The better answer is more boring, which in investing is often a compliment: review the portfolio, but do not let a rhyme drive the bus.

The calendar has a point, but not a crystal ball

The “sell in May” argument is not pure superstition. Historical data shows that the six months from May to October have often been weaker than the six months from November to April.

Historical data gives the old rhyme some support, but only some. Fidelity notes that since 1945 through April 2026, the S&P 500 gained about 2% on average from May to October, compared with roughly 7% from November to April. Reuters, citing CFRA data, gives a similar message: the long-term May to October return is weaker than the November to April stretch.

That is worth knowing. It means seasonality can describe market weather. But it does not tell you exactly when to leave the house.

The problem is variation and the recent picture is less tidy. Reuters also found that, over the past decade, the May-to-October period returned about 7% on average, including a 22.1% gain in 2025.  In other words, the “bad” months have often been rather good. Markets can be rude like that.

The 2026 backdrop also complicates the picture. It is a US midterm election year, and Reuters notes that in five of the last 10 midterm years, the S&P 500 declined from May to October, with an average loss of about 1.5%. That is a reason for risk awareness. It is not a reason to confuse the calendar with a smoke alarm.

The real cost is missing the rebound

Market timing sounds sensible because it promises control. Sell before trouble, buy back after trouble. Easy, except for the minor issue that nobody rings a bell at either moment.

The biggest risk is missing strong days. Market rebounds often arrive quickly, usually when the headlines still look unpleasant. That is why long-term investors can damage returns by stepping out and waiting for “clarity”. Clarity is expensive. By the time everyone feels calm, prices may already have moved.

J.P. Morgan Asset Management research shows that staying fully invested in the S&P 500 over the last 20 years delivered far stronger annualised returns than missing just the 10 best days. The exact numbers change with the period studied, but the lesson does not: a small number of good days can do a large amount of work.

This matters for investors because most portfolios are built for goals, not seasons. Retirement, education savings, house deposits and long-term wealth building do not run on a May to October schedule. They need time, diversification and behaviour that survives bad headlines. That does not mean doing nothing. It means doing the right kind of something.

2026 is a review moment, not an exit signal

The current market has real risks. US equities sit near record highs. AI-linked shares have carried a large part of the enthusiasm. Oil prices remain elevated as geopolitical risks keep inflation worries alive. Corporate earnings have been strong, but the bar is now higher. At the same time, market sentiment remains fragile, and the rally has been relatively narrow. Investors still like the story, but it is being carried by a small group of heavy lifters. That is the useful message for 2026. The issue is not whether May is dangerous. The issue is whether a portfolio has become too dependent on one market, one theme or one outcome.

A long-term investor can use May as a check-up. Are shares still aligned with the time horizon? Is the portfolio too concentrated in US technology? Is there enough exposure to other regions, sectors or asset classes? Is there cash for near-term needs, so market volatility does not force bad selling? That is more practical than disappearing for the summer and hoping September sends an invitation.

Risks to watch

The first risk is inflation. If oil prices stay high, transport, energy and production costs can rise again. That could make central banks less comfortable cutting interest rates. Investors should watch oil prices, bond yields and inflation releases.

The second risk is narrow leadership. If only a handful of AI and mega-cap technology stocks drive the market, index gains may hide weakness underneath. Watch market breadth, which simply means how many stocks are participating in the rally.

The third risk is complacency. Record highs can make investors feel safer than they are. Valuation matters more when expectations are already warm. A good company can still be a poor investment if too much optimism is already priced in.

Investor playbook

• Review concentration. Check whether one region, sector or theme now dominates the portfolio.

• Rebalance gradually. Bring positions back toward target weights instead of making all-or-nothing moves.

• Keep cash matched to needs. Money needed soon should not depend on summer market behaviour.

• Use regular investing. Monthly contributions can reduce the pressure to pick the perfect entry point.

A rhyme is not a strategy

The old rhyme survives because it is catchy. That does not make it a strategy. In 2026, “sell in May and go away” is best treated as a reminder to check risk, not a command to abandon the market. Seasonality can inform investors, but discipline, diversification and time usually do more of the heavy lifting. The calendar may whisper. A long-term plan should speak louder.

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Today’s Links The view from the top - Ken Griffin interview Worth a listening to someone who has assembled a USD 50 billion fortune. Comments on the Iran war, US politics, some interesting comments on tech booming perhaps more than AI itself and more.

Tracking the AI tech developments and directions that are driving AI-related stocks Stratechery.com is a great place to start for in-depth articles on key AI industry players (mostly chip- and software, not things like, the shifts in which technologies see more demand as AI moves to the next phase, the spin and analysis of what companies are saying on their earnings call, etc. AI tech is shifting so quickly - and the recent podcast on Intel’s earnings, for example, helps investors to understand the wild reception of AMD’s earnings and the huge boost to Intel’s shares as CPUs are receiving more intense focus than previously. The shift in data center loads from training to inference and increasingly to agentic AI will see intensifying use of CPUs as opposed to GPUs.

My favourite writer on the post-American order It’s not that I share his viewpoints, but his writing is just so fantastically crafted and he brings up extremely important perspectives on what might happen if the rest of the world decides it doesn’t like the way the US is behaving and decides to go its own way rather than submit to becoming a part of the US…empire, patronage system, etc..

The Sportster is back! I never knew it was gone as I haven’t fiddled with motorcycles since my early 20’s (a long long time ago) - but the big old 1200 CC one was always one of my favourite Harley Davidson models, and now they are bringing back the classic 883 Sportster and selling it for a reasonable price that they can still make money on. Some even lower-end smaller models are also on the way, which is very un-Harley Davidson, but shareholders are rejoicing (see below).f

Chart of the Day - Harley Davidson (HOG - natch!)

Its’s another day of AI chip-stock frenzy, but I am getting a bit wary of the spectacle and uneasy with where it is all headed - we are somewhere close to- or fully in a mania cycle that won’t end well, whenever it ends. So instead, I turn my attention to a company that is very much not AI- related, a real blast from the past: Harley Davidson. My father rode a Harley, something he had long wanted to own and then along came middle age and voila, he flew all the way to El Paso from Houston (about 1200 kilometers) to pick up his 1993 Heritage Softail Classic, which looked like this one, except it was black and with leather bags, of course. I also learned to ride on that insanely heavy bike, but it was very easy to ride with its low center of gravity. It was either the last, or one of the last Harley Davidsons that had the engine directly mounted to the frame, which meant the fillings in your teeth were about to rattle out after a couple of hours on the highway from the vibrations. Anyway, as noted in WSJ article link above, I was pleased to see the company is trying to innovate with a refresh of old models and even bringing in some new ones. As the chart below shows, this is generating some solid enthusiasm and the shares are up more than 50% from the recent lows. The valuation of the company is pricing in somewhat of a turnaround, given its recent falling revenues and the overall question of whether motorcycles are a dying industry because younger generations don’t want to take the risks. I know I would never encourage any of my four children to ride because of the dangers of motorcycle riding, but lucky for me my father was from an old generation that was willing to take such risks and I had the opportunity. Let’s ride!

Questions and comments, please!