The 'January Effect' Is No Longer Very Effective

Stock investors have long looked to January to tell them where the market might be headed for the rest of the year. And for good reason: Over the long haul, the-first-month-of-the-year indicator has seemed to work pretty well. Historically, stocks have tended to rise in January. And in general, when stocks were up at the end of January, eleven months later shares logged a positive year; when January was down, shares ended the year in the red. Only 27% of the time since 1929 have the market and January parted ways, according to data from Standard & Poor's.