Sell in May and go away and other market myths
Market myths busted
Updated 
3 min. read
Market myths are short, simple ways to try to make sense of the markets and make investing decisions. Jason Heath, Managing Director at Objective Financial Partners Inc., breaks down three myths that many investors think will always hold true.
Market myth: Timing the market
One of the most common market myths relates to market timing. Market timing is very difficult to do. You can get right, or you can get lucky once or twice. But, to do it consistently, there's a lot of academic research that suggests it's difficult - if not impossible - to do.
Market myth: Sell in May and go away
The idea is that you should sell stocks - either reduce or get rid of them completely - in May and not buy back in until after Halloween. When you look back to 1950, over the last 70 years, the November to April period for stock markets has been stronger. So, over the long run, selling in May and going away has been beneficial.
That said, Heath believes these trends are random. Just like any other sort of myth you could find if you looked hard enough. In the last 10 years, selling in May and going away has not worked out as well for investors.
Market myth: October is a bad month for stocks
There is another market myth that October is a bad month to invest. And there have been some historically bad Octobers. The crash in 1987 happened in October. The financial crisis back in 2008, occurred largely in October when the downturn began. But, over the long run, October has been a reasonably good month to invest.
Some of these market myths have more to do with randomness and trends that people have identified. As opposed to something you can forecast into the future and capitalize on.
One of the best ways to avoid market myths is through education. Whether it's a financial advisor, an accountant, a lawyer, a financial planner - there are professionals out there that can help you make sense of the financial decisions that you're looking to make. But, most importantly, you can make better investment decision by educating yourself.
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The opinions and views expressed in this presentation are those of the presenter and not necessarily BMO InvestorLine Inc. This presentation is prepared as a general source of information and is not intended to provide legal, investment, accounting or tax advice, and should not be relied upon in that regard. If legal or investment advice or other professional assistance is needed, the services of a competent professional should be obtained. Any information contained in this presentation does not constitute and shall not be deemed to constitute advice, an offer to sell/ purchase or as an invitation or solicitation to do so for any entity. The content of this presentation is based on sources believed to be reliable, but its accuracy cannot be guaranteed. BMO InvestorLine Inc. and its affiliates, sponsors and employees do not accept responsibility for the content and makes no representation as to the accuracy, completeness or reliability of the content and hereby disclaims any liability with regards to the same.