Six months ago, as we were entering May, I was surprised to read at least three articles that mentioned the old stock market adage "sell in May and go away". The second part of the adage, "and buy back after St Leger's Day" was not mentioned. As we know, Scorpion won the final classic of the English horse racing season ten days ago.

The phrase was coined in the days when stock market activity was dominated by rich individuals, many of whom had bought a seat on the exchange. It was quite normal in those days for them to spend much of the time between May and September holidaying or going to all the social engagements, such as Henley, Wimbledon and all the big races.

In 1961 the Trustee Investment Act, at last, permitted most pension funds and insurance companies to divest from gilt-edged stocks into equities for the first time. Gradually, over time, the institutions took over the dominance, especially as the number of collectives like investment trusts and unit trusts mushroomed. These days, I am not aware of any fund managers who are absent between May and September.

Data available from Datastream allows analysis of the adage since 1965. Since then, if anyone had sold in May and bought back after the St Leger, it would have ended almost exactly the same on two occasions, in 1970 and 1990.

Otherwise, it would have been right to have sold in May 17 times and wrong 22 times. It was nearly always better to respect the main trend in force at the time instead.

Since May and the St Leger this year, the FTSE has risen 11.6 per cent, which is a lot to have missed out on for superstitious investors.

So what is in store for the rest of the year? Given that oil prices and metal prices account for an influence of about 25 per cent of the FTSE 100, then it would be fair to conclude that with little sign of price retrenchment, the market will remain strong.

Having joined troubled Party Gaming as a new boy to the FTSE 100 yesterday, oil exploration group Cairn Energy will announce interim results today for the first half of the year.

This is the company that bought Shell's concessions in Rajasthan and discovered substantial reserves underground.

During the past few months, Cairn has revealed its 12th major find in the area since 1998. With output rising rapidly over the full year, Cairn's revenues will surge from £110.18m to £136.7m, going straight to the bottom-line profit figure. Pre-tax profits are expected to gush from £10.84m to £35.8m.

Today also sees Tesco publish results for the six months to the end of August.

Both the core UK business and its international operations have weathered a difficult retail market, having delivered a 14.6 per cent increase in group sales for the 12 weeks to May 21. Like-for-like sales were up by 8.8 per cent as Tesco continued to steal market share from its rivals.

Despite higher oil-related costs and rising interest rates, the business is hoping to deliver a full-year turnover of £37.9bn, with profits of £2.2bn, up from £2.02bn. As their adage goes, "Every Little Helps".

- For investment advice contact Anthony Platts on 01642 608855.

Published: 20/09/2005