Sell in May and Go Away: 2025 Relevance for Australian Investors

For generations, the phrase ‘Sell in May and Go Away’ has echoed through trading floors and dinner tables alike. This classic adage suggests that investors would do better by selling their equities at the start of May, staying out of the market during the supposedly sluggish winter months, and then returning in spring. But as we navigate the ever-evolving Australian financial landscape in 2025, does this strategy still stack up? Or is it just a relic of stock market folklore?

What is ‘Sell in May and Go Away’—and Where Did It Come From?

The roots of ‘Sell in May and Go Away’ stretch back to the old English saying, “Sell in May and go away, come back on St. Leger’s Day.” Historically, it referred to a period when the British elite would leave London for summer holidays, resulting in thin trading volumes and lacklustre market performance. Over the decades, the concept has crossed oceans and become a common talking point among Australian investors as well.

The premise is simple: share markets tend to underperform during the cooler months (May to October) compared to the warmer months (November to April). But does historical data—and current market dynamics—support this?

2025 Market Trends: Is Seasonality Still a Factor?

Recent analysis of the ASX 200’s seasonal returns shows that while there have been years where the May–October period lagged, the pattern is far from reliable in the modern era. Several factors have reshaped market behaviour:

• Globalisation: Australian markets are now heavily influenced by international events, from US Federal Reserve decisions to geopolitical tensions in Asia.
• Rise of retail trading: Platforms like Stake and Superhero have made markets accessible year-round, increasing trading volumes even in traditionally ‘quiet’ months.
• 2025 policy changes: The recent adjustment to capital gains tax (CGT) rules, particularly around short-term holdings, has made frequent seasonal trading less attractive for many investors.

In fact, 2023 and 2024 both saw positive ASX returns during the May–October window, bucking the old trend. While past decades sometimes showed a seasonal dip, recent years have highlighted that market performance is increasingly driven by macroeconomic news, company earnings, and global shocks rather than the calendar alone.

Should Aussie Investors Still Care in 2025?

For most Australians, ‘Sell in May and Go Away’ shouldn’t dictate an investment plan. Here’s why:

• Missed opportunities: Pulling out of the market for half the year risks missing rebounds and dividend payouts. For instance, many ASX-listed companies announce full-year results and dividends in August and September.
• Transaction costs: Even with low brokerage fees, frequent buying and selling can erode returns—especially with the 2025 CGT tightening for short-term profits.
• Superannuation strategies: Most Australians’ largest investment is their super fund, which typically maintains a long-term, diversified allocation. Super funds do not attempt to time the market based on seasonal adages.
• Behavioural traps: Timing the market is notoriously difficult. Numerous studies show that staying invested through ups and downs generally outperforms trying to pick the best entry and exit points.

Instead, experts in 2025 recommend focusing on:

• Maintaining a diversified portfolio
• Setting clear investment goals
• Staying informed about policy changes, such as the ongoing review of franking credits and superannuation contribution caps

Real-World Examples: What Recent Years Tell Us

Consider the COVID-19 recovery period: in 2020, the ASX 200 rebounded strongly from May to October. In 2022 and 2023, volatility was high, but investors who stayed the course typically fared better than those who sold out in May and missed later rallies.

In 2025, the Reserve Bank of Australia’s monetary policy shifts and ongoing global tech sector growth have both contributed to year-round volatility and opportunity. The bottom line? Calendar-based strategies can leave you on the sidelines just when the action heats up.

Conclusion: Investing for the Long Haul in 2025

While ‘Sell in May and Go Away’ makes for a catchy headline, the data and market conditions in 2025 suggest it’s an outdated approach for most Australians. Rather than chasing seasonal patterns, investors are better off focusing on fundamentals, diversification, and long-term planning.