Jakarta. Indonesia’s equity market may not be immune to the global investing adage “Sell in May and Go Away,” as local stocks tend to weaken during the mid-year period, according to Aria Santoso, President Director of the CSA Institute.

While the market axiom, which originated in the UK as “Sell in May and go away; don’t come back until St. Leger’s Day,” refers to seasonal underperformance during the summer months in Western markets, Santoso said a similar pattern of softening appears evident in Indonesia.

“We do see a recurring trend where the index declines around June, July, and August,” Santoso told Beritasatu TV in an online interview on Wednesday. “This may not be entirely linked to the summer holiday cycle in the West, but in Indonesia, it’s undeniable that there’s a cyclical slowdown mid-year, lasting until around September.”

In response, Santoso advised investors to consider paring back aggressive positions between May and September and take a more cautious stance during what he views as a soft patch for equities.

“Investors should avoid being too aggressive in these three to four months,” he said, suggesting that once the slowdown subsides, opportunities could emerge for “buying on weakness” ahead of a potential year-end rally.

Looking beyond seasonal patterns, Santoso shared additional strategies for navigating volatility, particularly for retail investors. He stressed the importance of investing in companies with strong fundamentals and a proven ability to rebound from crises.

“In a volatile market, short-term sector rotation or entry-exit trades are acceptable,” he said. “But if the fundamentals are solid, extending the holding period is reasonable. On the other hand, companies with weak prospects should be divested and replaced with undervalued stocks with better outlooks.”

Bloomberg data show that the Jakarta Composite Index (JCI) tends to underperform in May, with an average historical decline of 1.80 percent, including drops of 4.08 percent in 2023, 1.11 percent in 2022, 0.80 percent in 2021, and 3.64 percent in 2024.

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