NEW YORK (TheStreet) -- The old adage "sell in May, then go away" is a trading strategy that suggests it is wise to stay invested through May, and then sell stocks, holding little to no equity exposure over the historically volatile summer period, and then reinvest in November. This year, investors may want to consider an amended version: "Sell in March, then go away."

FBN Securities ran a 20-year study of "sell in May" in 2013, and found that it is accurate. In the study, a $1,000 investment made in the markets in January 1994 was split up into three buckets:

A) a grouping that invested in the S&P 500 for January, February, March, April and October through December
B) a group that invested in the S&P500 for May through September and
C) an investment for all 12 months.

Group C, the full allotment of months, grew to roughly $4,000 while Group A grew to roughly $5,000. The lagging months were Group B, the May through September period, which actually lost, ending under $1,000.

This year, it could pay to take action before May. Why? Well, whether it's looking back over history, or looking forward into the future, neither the mirror nor the windshield provide enough confidence to stay invested right now. Managing risk at this moment points to holding cash and avoiding the volatility.

The U.S. Equity markets, as measured by the S&P 500, are sitting near 2,100. Investors have had an astonishing run over the past six years. It was March 9, 2009 that the S&P 500 hit its low point from the financial crisis, bottoming at 676. Since that day, the market has returned over 200%.

I've been on this rollercoaster before. When I got into the financial services business after college, it was 1987. I can still recall the devastation of October 1987. A few years later, I was working at a bank during the 1990 recession, a period that had a very negative impact on stocks. By 1998, I was working with a hedge fund-of-funds, and remember vividly the fallout of the Russian Ruble crisis and the demise of Long Term Capital.

These three events took their toll on the markets, and on investors' confidence. The next two events happened in a relatively short period of time, and had devastating effects on the markets, institutions and individuals. The dot-com bust in 2001 and the Great Recession of 2008 and 2009 cost stocks over 50% from high to low. In both cases, the markets made up these losses, and then some. But, it took several years and a toll on investor confidence.

The problem looking through the rear window essentially highlights three issues: 

1) The market is up over 200% since 2009. Historically, this is a very large gain without a pullback.

2) The markets have historically tended to run up, have a problem, correct, run up, have a problem, and correct every three to five years. It has been six years, without a problem.

3) Looking at the dates when the markets have historically topped:

  • 1987/October, 1990/Fall
  • 1998/August
  • Tech/September 2000 and
  • Financial Crisis/Fall 2008

Here's the interesting point: All of these crashes would have been avoided had an investor sold in May.

We are mired in uncertainty. Market volatility is increasing with the geopolitical, macroeconomic and financial picture changing daily. Middle East tension continues to be high. Europe isn't as clear as it has been historically and Russia is proving to be difficult to estimate. The massive fall in oil prices and the readjustment of the Euro are potential catalysts for a new set of issues. And the wildcard, where is the U.S. in the interest rate cycle?

It feels as if we are near a turning point. A simple tally of 1% moves in the S&P tells us that the direction is unclear. Markets are up one day and down the next. Employment gains are solid, and markets move up. The next day, wages are stuck, and markets move down. No leadership.

The probability of investors gaining another 5% to 10% in the next six to nine months seems low relative to the higher probability of losing 10% to 20% in the same period. 

Absent a compelling reason to stay, it seems prudent to sell the market today and take an early summer holiday. By September or October, perhaps there will be more clarity and we can re-establish an entry point. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.