The “January Effect”

What it is – How it works

 

 

 

 

 

[By Dr. David E. Marcinko MBA]

The January effect is a hypothesis that there is a seasonal anomaly in the financial market where securities’ prices increase in the month of January more than in any other month.

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US-SP500-January-effect_2006_2016

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This calendar effect would create an opportunity for investors to buy stocks for lower prices before January and sell them after their value increases.

“Santa Clause Effect” or “Rally: https://medicalexecutivepost.com/2018/12/24/will-there-be-a-santa-clause-rally-this-year/

Dictionary: https://www.amazon.com/Dictionary-Health-Economics-Finance-Marcinko/dp/0826102549/ref=sr_1_6?ie=UTF8&s=books&qid=1254413315&sr=1-6

LINK: http://www.msn.com/en-us/money/markets/the-january-effect-could-be-the-markets-big-hope-for-a-bounce/ar-BBRuO2k?li=BBnb4R7

NOTE: Also known as the “Turn-of-the-Year Effect” and “Calendar Effect.”

Assessment

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RESOURCES:

“Insurance & Risk Management Strategies for Doctors” https://tinyurl.com/ydx9kd93

“Fiduciary Financial Planning for Physicians” https://tinyurl.com/y7f5pnox

“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8

THANK YOU

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2 Responses

  1. JE

    The January Effect is not a new phenomenon – it was first observed by investment banker Sidney Wachtel in 1942.
    At first glance, data broadly seems to support the theory. From 1890 to 2020, 85 of the 130 years saw an uptick in January on the U.S. stock market.
    The figures are apparently even more optimistic across the globe, with Japan seeing 74% of its starts to the year being positive and Australia seeing 78% in that period.
    Novice investors leaped on the hypothesis thinking they had discovered a quick win to turn around their fortunes. They were wrong.

    Kevin

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