“Sell in May and go away” is an old investment saying probably inspired by stressed traders looking forward to their summer vacations.

Nevertheless, studies covering several decades have proven that investment returns are, on average, considerably lower between May and October than from November through April. The evidence indicates the strategy works globally: In Canada, winter returns were an average of 7% per year better than for the summer, and in the U.S. stock market, 6.5% better.

That doesn’t mean investors will lose money by staying in the market from May to October—just that returns generally will be unexciting. It also doesn’t imply that the phenomenon occurs every year.  There have been exceptions, and the opposite has happened, with investment returns higher from May to October.

The graph on the next page, credited to FBN Securities, demonstrates the powerful outperformance possibilities of a simple trading strategy based on this phenomenon. When U.S. stocks were held only from November to April, $100 invested in 1995 became more than $500 over 20 years, while the same investment held only during the summer went nowhere.

So what could investors do to take advantage of this market anomaly?

My investment philosophy is that stocks offer excellent returns when held long term. The Dividend Champions Portfolio subscribes to the same philosophy so that I am not inclined to sell holdings every May in an attempt to extract the additional return associated with this anomaly.

But May has become a good time to review my portfolio—call it a late spring cleanout. The idea is to make sure every stock still deserves its position in the portfolio and sell any holdings with high valuations or other problems that may generate poor returns.

Here is my short checklist for spring-cleaning your portfolio:

Unrealistic valuation. Has the stock performed so well that it’s priced unrealistically?

Deteriorating profitability and cash flow. Has the company’s financial performance deteriorated recently or are there warning signs indicating it may weaken soon?

Overstretched balance sheet. Many companies took on considerable debt to benefit from low interest rates. Will all your portfolio holdings survive a higher interest rate environment?

Skewed holdings. Stocks that have appreciated sharply in price can produce an unbalanced, lopsided portfolio. If so, this is a good time to trim back those positions and rebalance the portfolio so that no single stock or industry dominates.

To conclude, investors should be extra careful with their stock selections over the seasonally weaker period and should review all holdings with a critical focus on the potential for further acceptable investment returns from the current price level.