We're going to read about the "January Effect" on a daily basis for the next few weeks. It's the time of the year when the stock market in the US rises because it's January. It's a great time to buy, the hypothesis goes. It has been around for decades and resurfaces every January.
It's based on the idea that there are some powerful seasonal anomalies that cause stocks to rise in January. These are among the most often touted reasons:
- Tax selling by investors in late December to "harvest" losses they had on some stocks to offset capital gains they'd realized on other stocks. This common tax strategy, according to the "January effect" hypothesis, leads to more emphatic buying in January, big enough to move the needle.
- Bonus time, when sudden piles of money in the hands of individual investors begin percolating through
0 comments
Hide comments