St Leger Day myth could cost investors £50k, says Hargreaves Lansdown

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Following the old adage to ‘sell in May, go away and come back on St Leger Day’ could cost investors almost £50,000 over the last 10 years, research by Hargreaves Lansdown suggests.

The saying calls on investors to sell down their equity holdings in May and buy back into the market on 16 September, implying that the City is more preoccupied with social events like Cowes, Chelsea Flower Show and Wimbledon than by the markets over the summer.

However, Hargreaves Lansdown says the strategy would have paid off only four times over the past ten years. A buy and hold investor with £100,000 in the FTSE 100 between 1 January 2003 and 31 December 2012 would be £47,627 better off than a St Leger Day investor.

In addition, it looks like the adage will be proven wrong in 2013. The FTSE 100 and FTSE All share rose a respective 0.93 per cent and 1.87 per cent from 1 May to 22 August, with more than 10 trading days left to go before St Leger day.

Hargreaves Lansdown senior investment manager Adrian Lowcock says: “Over 10 years the results are conclusive: trying to predict when markets will rise or fall is a very dangerous and potentially costly strategy. Far too much time is spent on trying to anticipate when you should buy and sell investments.”