Halloween Is The Day 'Sell In May And Go Away' Investors Come Back To Life

Vampires, mummies and corpses arent the only ones rising from their slumber on Halloween night.

October 31 marks the return of Sell in May traders as well. The Sell in May trading strategy is also referred to as the "Halloween Strategy."

With only two months left to go in 2016, the year is shaping up to be a solid one for stock investors. Barring a November or December collapse, the SPDR S&P 500 ETF Trust (NYSE:SPY) is in-line to finish the year with mid single-digit gains.

However, the sell in May crowd hasnt had such a great year. In fact, the SPY is up 2.2 percent since May 1.

Historically, the stock market has performed much better in the six months from November through April than it has from May through October. Since 1950, the Dow Jones Industrial Average has averaged just a 0.3 percent return from May to October compared to a 7.5 percent gain from November to April. The sell in May trade involves traders dumping stocks on May 1 and buying back in on October 31.

Unfortunately for May sellers, the trade hasnt worked in recent years. Over the past four years, the S&P 500 has averaged a 4.8 percent gain from May 1 to October 31.

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