Does 'sell in May and go away' hold sway?

THE stock market has its fair share of sayings, pearls of wisdom like "buy in anticipation, sell on news", "buy the dips, sell into strength" and "as goes January, so goes the rest of the year", the last a reference to the belief that January's performance tends to foretell the whole year.

The current favourite is "sell in May and go away", which has been employed innumerable times over the past two weeks to describe the pressure on equity markets this month.

At first glance, other than offering a catchy rhyme the phrase is illogical because there is no reason why the month of May should be any different from any other. Still, as advice it does have some merit since anyone who did cash out or short sell at the start of the month would find themselves in a much better position compared to others who bought and held.