Does January doom spell a year of gloom?

Examining the historic evidence of the so-called "January effect" on the share market, we find there is nothing to suggest it's a factor for investors.

Summary: As we come to the end of a bumpy month of trading worldwide, it’s worth considering whether the “Other January Effect” – the idea that market returns in the month of January predict the overall returns for the year ahead – is a useful idea for investors. Our analysis of Australian share market data indicates that given past performance, the January Effect holds little weight. 

Key take out: Looking at Australian market data from the last 26 years, January returns have only successfully managed to predict that year’s overall market return 50 per cent of the time.



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