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“Sell in May”, the year-end rally, “triple witching day”: time-based investment strategies still enjoy a certain popularity on the stock markets. Yet science and empirical data have long shown that timing strategies perform significantly below average. But with an erratic President Trump back in the White House, timing is now well and truly dead. The only date investors need to remember today is the end of Trump’s term in office.

A commentary by Thorsten Fischer, Managing Director and Head of Portfolio Management at Moventum AM.

One of the oldest timing rules is probably “Sell in May and go away”. Its origins are unclear, but it’s rumoured to trace back to old England – to a time when stockbrokers would head off for their summer holidays in May and return in September. The rule is often completed with the advice to reinvest in September. In earlier decades, when a lack of market participants might have made such a rule relevant, there may have been some justification for it – but that’s no longer the case today.

Markets are more efficient now, and trading no longer happens just year-round but around the clock, invalidating many of the explanations behind seasonal patterns. Over the past ten years, stock market returns between May and October have been positive 80% of the time, with an average gain of nearly five percent.

What applies to the May rule is also true for other time-based patterns that might once have had some justification. Whether it’s the year-end rally, expiry dates on derivatives markets, the reinvestment of distributions after the turn of the year, or any other seasonal idea – markets now price in all of this in advance, smoothing out the effects to the point that they are barely noticeable.

Barely, because of course, these rules used to have some influence – if only due to the mechanisms of behavioural finance, the psychology of markets. Perhaps even due to occasional peaks in demand at specific times. But all that has come to an end in the era of Trump 2.0. Market rules – including those based on timing – require a certain degree of consistency to have any effect. And given the rapid succession of ideas from this US president, which at best build on one another but often contradict and replace each other, such consistency no longer exists. Timing is dead.

Or, to put it another way: the old rules of time-based investing have become obsolete. Perhaps new principles will emerge, based on different reference points. It might turn out that the markets calm down when the US president is on the golf course. And when he stops, it could mean new tariffs – or the reopening of long-abandoned prison islands. Perhaps the role of “White House Interpreter” or “Trump Prophet” will soon become more important than any other. Anyone who can predict today what Trump will announce tomorrow stands to make a fortune.

But until such thinking truly starts to move the markets, one much older rule still applies: a good company will withstand any crisis – regardless of the times. Even if it’s less exciting than watching the old man golfing by the sea, this approach is undoubtedly healthier in the long run. And while good companies will endure, the job of interpreting Trump will – hopefully – end with his presidency.