May kicked off on a positive note, however, we have now had 3 straight days of losses, making us wonder if May is indeed, one of those months we should be worried about?
Just like companies and products, every stock market has its trends and bellwethers. There are certain signs that you must track which can tell you when it is time to sell or perhaps to buy. These issues have nothing to do with the fundamentals of the companies. Instead, they border on exogenous factors that influence market behavior.
So we decided to look at stock market trends for May to see if there is anything we could glean; something that could help us project how May would perhaps end. We took a close look and this is what history tells us about stocks in May.
The chart above indicates that stocks have only lost in May, 8 years out of 33 years since 1985. The years were 1985, 1997, 1998, 1999, 2005, 2008, 2010 and 2015. May has returned gains every other year asides these 8.
That is a remarkable run if you consider how many boom and bust cycles we have had over the years. In fact, in the last two years, May has returned double-digit returns for the All Share Index.
So does that mean that this May will end positively? Maybe not, but if history is a guide, then stocks might perhaps end on a positive note.
