Sell in May? History Says Not This Year

Monday, 30 Apr 2012 | 1:25 PM ET

You know the axiom, sell in May and go away. But if history is any indication, that’s not going to be the case this year.

Sean Clark of Clark Capital Management has crunched the numbers and he says this year is different because it’s an election year.

“Since 1932, some of the best market gains have come during the summer months ahead of a presidential election,” he says on CNBC's Fast Money Halftime Report.

Take a look at his research:

Median Gains During Election Years Since 1932
May 1.09%
June 1.88%
July -0.67%
Aug 0.87%
Sean Clark, Clark Capital Management

Of course, history doesn't always repeat itself. There are plenty of negative catalysts that could make this year the exception - not the rule.

Clark recommends watching the S&P as a tell. "If we break below 1356, that's a problem." However, “If the market breaks higher, I’d take it as a sign that it’s trading in line with the normal presidential election year cycle. In that scenario, the market could climb to 1500.”

And ahead of the action, Clark recommends the following:

“While the economy is going through a soft patch, I think the economy is going to improve and the Fed is actively in the game,” he says.

Buy Stocks in May?
Discussing whether investors should "sell in May" or invest when the market "breaks," with Sean Clark, Clark Capital Management.

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Trader disclosure: On Apr 30, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JNPR; Joe Terranova is long NXPI; Joe Terranova is long JPM; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Jon Najarian is long GS CALL SPREADS ; Jon Najarian is long GLD CALL SPREADS; Jon Najarian is long RIMM CALL SPREADS; Jon Najarian is long MDRX CALL SPREADS; Jon Najarian is long LQMT; Jon Najarian is long CIGX; Jon Najarian is long CBOE; Jon Najarian is long CME; Jon Najarian is long DDMG; Steve Grasso is long ASTM; Steve Grasso is long AVAV; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long NUAN; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long PRST; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA; Mike Murphy is long HAL; Mike Murphy is long JPM; Mike Murphy is long SBUX; Mike Murphy is long FCX; Mike Murphy is short GPS; Tim Seymour is long TSU; Tim Seymour is long PBR

For Sean Clark
Clark Capital is long JPM
Clark Capital is long ABT
Clark Capital is long KO
Clark Capital is long XLY

For Catherine Arnold
The subject company currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse: PFE
Credit Suisse provided investment banking services to the subject company within the past 12 months: PFE
Credit Suisse provided non-investment banking services, which may include Sales and Trading services, to the subject company within the past 12 months: PFE
Credit Suisse has received investment banking related compensation from the subject company within the past 12 months: PFE
Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company within the next 3 months: PFE
Credit Suisse has received compensation for products and services other than investment banking services from the subject company within the past 12 months: PFE
As of the date of this report, Credit Suisse Securities (USA) LLC makes a market in the securities of the subject company: PFE
Credit Suisse has a material conflict of interest with the subject company (PFE). A Credit Suisse analyst involved in the preparation of this report has a (long/short) position in the common stock of PFE.

For Ed Maguire
CLSA and/or Credit Agricole Securities (USA) Inc and/or the analysts involved in the preparation of this report have reason to know that an affiliate of Credit Agricole Securities (USA) Inc and/or CLSA received compensation from Microsoft for non-investment banking products/services in the past 12 months.

For Adreinne Tennant
JMS is a market maker in this security, and may at any time hold a long or short position in this security: GPS

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