January Effect - Deepstash

Bite‑sized knowledge

to upgrade

your career

Ideas from books, articles & podcasts.

published 4 ideas

January Effect

investopedia.com

The January Effect

It is defined as a perceived seasonal increase in stock prices during January.

Analysts generally attribute this rally (a period of sustained increases in the prices of stocks, bonds, or related indexes) to two factors.

  1. A price drop happens in December - when ...

1

STASHED IN:

23

The January effect was first noticed in 1942 but has been less pronounced in recent years. The hypothesis suggests that markets as a whole are inefficient. Efficient markets would not follow this effect.

Small caps - companies with a relatively small market capitalisation ...

STASHED IN:

18

Besides tax-loss harvesting and repurchases, and investors putting cash bonuses into the market, the January Effect is affected by investor psychology.

  • Some investors feel that January is the best month to begin an investment program.
  • Others think that mutua...

1

STASHED IN:

18

  • A study analysing data between 1904 and 1974 revealed that the average return for stocks during January was five times higher than any other month, particularly in small-capitalisation stocks.
  • Another study from 1972 to 2002 found that the Russell 2000 inde...

STASHED IN:

20

0 Comments

Discover and save more ideas by creating a

FREE

Deepstash account.

Develop a

reading habit

, save

time

and create an amazing

knowledge library

.

GET THE APP: