Is this just sentiment, economic truth or simple folklore. Could it just be we are now in September and investors are ready to jump back in and any excuse will do?

In September 1776, just a few years after the founding of the London Stock Exchange, an Irishman, Anthony St Leger, first ran his flat race at Doncaster. Still being run today and marking the end to the flat racing season, who would have believed that this event would lend its name to one of the oldest and most common trading strategies in existence?

Take into account the market crashes that occurred in the Octobers of 1987, 1997, 1998 and the most famous of all back in 1929, perhaps investors should really be buying back in November. Research carried out by stock market historian David Schwartz shows that following the old adage over the past fours years would have avoided an average annual loss of around 1.6%.

The latest edition of the American stock traders Almanac agrees with such findings. Calculations conducted on a $10,000 investment in stocks and shares back in September 1950 and then sold in the May of every year until 2004, would have seen the initial investment of $10,000 evolved into $486,000. But by doing the opposite and selling in September and buying during May, that $10,000 investment would have actually been reduced to $9,640!

There are of course some striking exceptions to this rule. Between May and October 1980, the FTSE 100 grew by a whopping 26% after exchange controls were abandoned and even as I write this there may be a few more economists or commentators that have joined the masses describing the old adage as no more accurate than flipping a coin