A shift in seasonal trading strategies is emerging on Wall Street, challenging longstanding investment wisdom. The well-known adage “sell in May and go away” is now under scrutiny as analysts from Oppenheimer are encouraging investors to reconsider this approach in light of the upcoming 2026 midterm elections.
Historically, the “sell in May” strategy has proven beneficial for investors. Data shows that since 1950, the S&P 500 experienced an average gain of only 2.1% from May to October, compared to a significant average of 7% from November to April. However, Oppenheimer’s analysts propose a new mantra: “Sell in July for a Big October Buy.” They base their recommendation on the historical impact of the U.S. presidential cycle, which tends to coincide with four-year equity cycles.
Typically, midterm election years are characterized by market volatility. Yet, Oppenheimer’s analysis suggests that the 2026 midterm elections may yield a different outcome due to the presence of a second-term president. Analysts noted that sustained market weakness has been less frequent during such years, giving reason for optimism.
The firm pointed out that, in past midterm years under second-term administrations, the S&P 500 generally sees a rally through April, followed by a cooling period into July, and then a correction during the third quarter. This pattern could position the equity market for a robust upswing ahead of the pre-election year. Observing the current landscape, they emphasized, “Given the lack of market-top warnings, we would view mid-year weakness as temporary, and favor being fully invested by Q4.”
Moreover, Oppenheimer’s analysts addressed potential midterm year volatility, stating, “Volatility is the cost of admission for long-term returns—even in strong years.” Their perspective aims to encourage investors to adopt a more proactive approach rather than retreating from the market during traditionally turbulent times.
Bank of America is echoing similar sentiments, suggesting a reevaluation of the “sell in May” strategy. The firm has proposed a more tailored trading pattern to capitalize on anticipated market fluctuations this year. Additionally, Jeffery Hirsch, a well-known market strategist and editor of the Stock Trader’s Almanac, has identified emerging trading patterns stemming from the Trump era. He noted that stocks often hit a low in late March or early April, and the S&P 500’s low on March 30 signals potential gains ahead for investors.
As the market evolves and new dynamics come into play, the consensus among these analysts indicates a fundamental shift in how investors might approach seasonal trading strategies in the coming years, particularly in the context of midterm elections under a second-term president. Investors are urged to remain engaged and adaptable, looking toward the possibilities that the latter half of the year can offer.
