“Sell in May and Go Away” : Smart Strategy or Just a Market Myth for Indian Investors ?

Every year around this time, a phrase starts making noise in global stock markets — “Sell in May and Go Away.” It’s catchy, sounds smart, and has been a part of Western investing wisdom for decades. But here’s the thing — just because it’s a famous saying doesn’t mean it fits every market. Especially not the Indian market, which dances to its own tune.

So, should Indian investors take this advice seriously in May 2025? Let’s break it down.

Where Does This Phrase Even Come From ?

This saying has its roots in the United States and the United Kingdom. Historically, data has shown that stock markets in these regions tend to perform better between November and April, compared to the May to October period. Why? Mostly because many investors, especially institutional ones, take vacations during the summer months. There’s also a general slowdown in corporate activity.

To give you a number: the S&P 500, one of the biggest indices in the US, has delivered an average return of about 6.9% from November to April, but only 2.1% from May to October over the last 50 years.

But here’s the catch — India doesn’t follow this seasonal pattern. Our investors don’t go on long summer breaks. In fact, some of the busiest market activity happens during this period. So, should Indian investors really be worried about May ?

India’s Reality : No Clear Pattern in May

Let’s look at some actual numbers.

If we check the Nifty 50’s performance over the past 10 years, we find that May has delivered an average return of just 0.14%. But more importantly, six out of those ten years were actually positive for the index.

Some Mays were great — like in 2020 and 2021, when markets bounced back strongly after COVID-related shocks. Others, like 2022, were challenging due to global inflation fears and rate hikes. The point is: the results were mixed, and there’s no clear pattern that says May is always bad for Indian markets.

In short, it’s not the month that matters — it’s the macro environment.

What Makes May 2025 Different?

Let’s zoom into today. As we head into May 2025, the situation looks more promising than problematic.

1. Post-Election Stability :

India just concluded its general elections, and that means one big thing: policy clarity. Whether there’s continuity or a new government, markets love reduced uncertainty. Historically, Indian markets have shown strength in the months following national elections.

2. Crude Oil Prices Are Under Control :

Crude oil — a big factor for India’s inflation and import bills — is currently trading below $85 per barrel. That’s good news for inflation, the rupee, and the overall economy.

3. FII Flows Are Picking Up :

Foreign Institutional Investors (FIIs), who had been pulling out due to global uncertainty, are now coming back — especially into banking, infrastructure, and capital goods. Their return is a strong vote of confidence in India’s growth story.

4. Domestic Demand is Strong :

From automobiles to FMCG to real estate, domestic consumption continues to grow. Companies are reporting solid earnings, and credit growth is steady. Even the monsoon forecast looks decent this year, which could support rural demand and agriculture.

Where to Focus Instead of Exiting

Instead of thinking about selling just because it’s May, investors should focus on where the opportunities lie over the next 4–6 months.

• Banking and Financials: With stable interest rates and strong credit demand, this sector is likely to continue its upward trend.

• Capital Goods & Infrastructure: Government capex and private investments are driving strong order books in these sectors.

• Auto & EV: As we move towards the festive season later in the year, demand in automobiles — especially EVs — is likely to build up.

Rather than stepping back, this may be a good time to realign portfolios, focusing on sectors with strong fundamentals and policy tailwinds.

Final Word : Follow the Data, Not the Date

It’s easy to get influenced by market sayings — especially when they’ve been around for decades. But the Indian market operates on different fundamentals. Global liquidity, domestic demand, government policy, crude prices, and corporate earnings — these matter far more than the calendar.

So if you’re wondering whether to “Sell in May,” ask yourself a better question: Is the macro environment telling me to exit, or is it offering me a good entry point?

Our view? Stay focused on the bigger picture. Watch earnings. Follow the money. Don’t sell just because it’s May.