Following the St Leger's Day adage could have lost you 10% this year

12th September 2016 - Investors following the St Leger's day adage - i.e. selling their UK equity holdings in May - could have missed out on gains of almost 10% this year*.

The St Leger's Day adage refers to the time when stock market traders either spent the summer on holiday or attending social or sporting events like Wimbledon and Ascot. As a result of less trading, any sudden market sell-offs were amplified. Therefore, it was suggested, investors were better off selling their holdings in May and investing again on St Leger's Day in September.

However, anyone following the adage this summer, could have missed out on gains of almost 10%. From 1st May to 10th September (the day on which St Ledger's fell this year), the FTSE All Share rose 9.92% - in spite of the volatility we experienced in June following the EU referendum.

Looking back over the past 35 years, the UK stock market has produced positive returns in the majority of cases (24 out of 37 years)** suggesting the adage, like the horses in the St Leger's Day race, has run its course.

*Source FE Analytics, total returns for the FTSE All Share, 1st May 2016 to 10th September 2016.

**Source: Fidelity, total returns for the FTSE All Share between 1st May and 1st September each year since 1980.  

Published on 12/09/2016