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VIDEO: Why They Say: 'Sell in May and Go Away'
When should you sell your stock? Figuring out the right time to sell is always hard for investors.
The mantra “buy low and sell high” are words many live by. Now, according to the Stock Trader’s Almanac, "investing in the Dow Jones Industrial Average between November 1 and April 30 each year, and then switching into bonds on May 1 has produced reliable returns since 1950, and with reduced risk." Not quite as catchy, that's why some say: "Sell in May and Go Away."
So what exactly is the Dow Jones Industrial Average anyway? The DJIA consists of 30 large and widely known public companies, including McDonald’s (MCD) and IBM (IBM). This year, Chevron (CVX) and Bank of America (BAC) were added to the DOW, replacing Altria Group (MO) and Honeywell (HON).
Of course where you place your money is entirely a personal decision. But consider this: Over the past 6 years, the Dow has an 8% rise during the November – April period, according to the almanac. “The cash moving into the stock market between November and April is more intense than the following six months, when people tend to focus on other things like vacation,” according to Jeffrey Hirsh, one of the almanac's authors. (Ah, vacation!) To learn more, click here to watch TheStreet.com's Gregg Greenberg's video.
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