'Sell in May and go away' has a spotty record as an investment strategy and stocks have seen positive gains through October in 9 of the last 10 years, LPL says

• The old Wall Street adage that investors should "sell in May and go away" doesn't always work.
• Over the past 10 years, stocks delivered positive returns during the six-month period between May and October.
• "Although you can't argue that these months historically have been weak, they still sport a positive return," LPL's Ryan Detrick said.

The old Wall Street adage that investors should "sell in May and go away" has had a spotty track record in recent years, according to a Monday note from LPL's Ryan Detrick.

The saying began in England and was originally dubbed, "sell in May and go away until St. Leger's Day," which referenced a popular horse race called the St. Leger Stakes that was held in September, marking the end of summer and a return of stock market traders and big trading volume, according to Detrick.

Since 1950, the May through October period has generated the lowest six-month period of returns for the S&P 500, with an average return of 1.8% and a win ratio of 65%. That compares to the period of November through April, when the S&P 500 has generated an average return of 7.1% with a win ratio of 78%, according to LPL.

But while the six-month stretch of May through October have been historically weak, that doesn't mean investors should sell out and avoid stocks, according to Detrick.

"Although you can't argue that these months historically have been weak, they still sport a positive return, so totally going away may not be wise," Detrick said, adding that extreme bearish sentiment among investors, combined with a healthy consumer and strong corporate earnings could be a recipe for success in stocks over the next few months.

And while historically May through October has been a weak stretch for stocks, that hasn't been the case over the past decade. Detrick found that the S&P 500 was up 9 out of the last 10 years from May through October, delivering an average return of 5.7%.

"Although our guard is up for some potential seasonal weakness and choppy action, be aware it could be short-lived and consider using it as a buying opportunity," Detrick said.

Bank of America's Stephen Suttmeier echoed similar thoughts on Monday in a note about the old Wall Street saying, and why it could be a poor trading signal for investors to follow.

"Since average May-October returns are not negative, the strategy of 'sell in May and go away' leaves much to be desired," Suttmeier said.