Consider a goals-based investment perspective going into summer
The old adage “April showers bring May flowers” proved true on Wall Street this year.
After falling 0.7% in April, the S&P 500 gained 6.3% last month, marking the index’s best May return since 1990 and its best monthly return since November 2023 (see the chart). Investors were heartened by a court ruling that could force President Trump to reduce or rescind his tariffs on other nations, as well as quarterly earnings results showing that the outlook for corporate profit growth remains healthy.
Another old adage, the one urging investors to “sell in May and go away” until November, would not have worked out well so far in 2025.
S&P 500 Monthly TR Returns (Jan. 2023 – May 2025)
Where do we go from here? Keep in mind that stock market returns during the “go away” summer months have been quite strong in recent years, with the S&P 500 averaging close to 7% over the three months from June through August since 2020. That said, it’s possible that some assets may have rallied too far, too fast lately. Also, the upcoming deadline for a tariff deal between the U.S. and Eurozone could weigh on stocks this summer.
Our thought: Skip the rules of thumb aimed at timing the markets, especially if they rhyme. Instead, consider helping clients establish personalized goals-based strategies designed to capture potential opportunities while effectively managing risks, and encourage them to stay focused on the longer-term objectives of their plan.
By Mike Dickson, Ph.D.
Originally published June 3, 2025
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The S&P 500 Total Return Index is a total return index that reflects both changes in the prices of stocks in the S&P 500 Index as well as the reinvestment of the dividend income from its underlying stocks. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.
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