Investors Shouldn’t Take the Summer Off

Maybe you’ve heard the old investing adage, “Sell in May and go away.” This approach suggests that investors should essentially take their gains and take a break from the stock market during the summer months.

With the kids out of school, summer travel plans, and other summertime distractions, trading volume tends to slow down during the summer months. So the thinking often goes that with less trading, prices should remain relatively stable, and investors won’t miss much if they take a break until fall to focus on all those summertime distractions. 

Others have pointed out that following a down winter in the stock market—such as the one we just experienced—historically stocks have tended to fare even worse in subsequent summers, so they suggest investors may be well-served by taking any gains from the recent bounce and staying on the sidelines for the upcoming summer. 

We disagree. Here’s a more Foolish approach… 

At Motley Fool Asset Management, we never encourage this kind of market timing. And if we look at historical data year by year, the picture isn’t nearly as simple as the phrase implies. Past summer trading volume was different each year, and was influenced by prevailing circumstances. 

For instance, May of 2020 saw more trading activity than usual due to the unusual circumstances of the COVID-19 pandemic. Some referred to the market during this period as the “socially distanced casino” as people looked for ways to fill their time under quarantine. This year, while volume has come down some from April, 2025, there’s actually more trading activity this May than last.

Further, compare the hypothetical growth of $1,000 invested continuously in the S&P 500 Index over the last few years, from January, 2018 through May 9, 2025, against the hypothetical growth of that same amount following the “Sell in May” strategy, and you’ll see that following that advice would have cost an investor dearly.

Method: Track S&P index value from the first trading day in January 2018 through May 9, 2025.¹

Could stocks go "on sale" this summer?

With regard to the second point above—that stock prices may fall this summer—we firmly believe that taking volatility in stride doesn’t mean hiding our heads in the sand. We cannot predict with certainty how the markets will perform in the future. All investing involves risk, including volatility. For active managers, periods of volatility are often where we find opportunities to take positions at more attractive valuations.

You wouldn’t want to miss out on your favorite store’s summer sale. In the same way, by staying engaged and monitoring the market, we believe we can make timely, opportunistic moves if potential opportunities arise during the summer months.

Here’s what we’re watching…

This summer, we’ll be keeping a close eye on some key factors. These include the shifting dynamics surrounding U.S. trade policy, import and export data, and tracking updates from retail companies through their sales and trading calls. Additionally, we'll be paying attention to earnings reports that should come out in July and August.

The bottom line is that investors who simply “go away” for the summer could miss out on key information and potential opportunities.

Of course, that doesn’t mean you need to stay locked inside, glued to your computer all summer—especially if you’re a shareholder of any of our ETFs. Every ETF we offer is powered by ongoing professional, Foolish analysis. So you can relax and enjoy your summer while still having professional investors working hard for your portfolio.