Did sell in May and go away just begin?

After ending higher over the first two trading days of May, on Wednesday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) reversed course and finished 1.5% lower.

While the market’s fall of 1.5% was hard to ignore, the individual price declines in some major stocks were even more alarming.

These were some of the biggest decliners yesterday…

BHP Billiton (ASX: BHP) sank 9.4% after the diversified global miner issued a statement regarding the failure of the tailings dam at the Samarco iron ore operation in Brazil late last year. The statement advised that Brazil’s Federal Public Prosecution Service had commenced legal proceedings for approximately US$43 billion for social, environmental and economic compensation.

Rio Tinto Limited (ASX: RIO) dropped 7.5% with iron ore down.

Santos Ltd (ASX: STO) ended down 8.7% after holding its AGM.

Woolworths Limited (ASX: WOW) slumped 7% after credit rating agency Standard & Poor’s announced that it had downgraded Woolworths’ issuer rating and senior unsecured noted by one notch to BBB.

Newcrest Mining Limited (ASX: NCM) wasn’t even a safe haven for gold bugs with the gold mining giant recording a share price fall of 4.6%.

It appears that many investors hit the sell button yesterday, should you sell too?

While “sell in May and go away” has a catchy ring to it and historical data does suggest that US markets tend to be weaker over the next six months than in the November to April period, investors should be careful about over trading.

Trying to time the market is a pursuit that is unlikely to be profitable in the long-run.

Markets will rise and fall in the short term but in the long-run they have a canny habit of going up.

Selling and then trying to time your re-entry in the hope of gaining a few extra percentage points is unlikely to be a long term winning strategy.

Rather than worrying about timing the market, investors are better served focusing on individual companies and their valuation and analysis.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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