On average, the stock market's performance in the months of May - October is significantly worse than the 6 months of the year just ended.

According to the 2005 Stock Market Almanac a six month switching strategy involving going long the market on November 1 and selling April 30 of each year is an "eye-popping strategy". Investing an initial $10,000 on May 1 of 1950 and selling on October 31, then repeating the strategy of buying May 1 and selling October 31 yields a 54 year loss of $318. Your $10,000 is now $9,682. A similar strategy, this time buying on November 1 and selling April 30 turns that $10,000 invested in 1950 into $492,060, a 54 year gain of $482,060.

Simple strategies such as this have the ability to dramatically improve your long term investing returns. Imagine the compounding that could take placeif you were to own only what you deem were the best few stocks in the market during the worst six months of the year and avoid that drag on investments. Achieving positive returns in that period could, depending on your tax situation, generate far greater returns than a typical buy and hold strategy.