From Chart of the Day, comes this explanation of the so-called January effect.

A common topic this time of year is the January effect. Many long-term studies have confirmed that small stocks have consistently outperformed their large stock counterparts in January. However, today’s Chart of the Day demonstrates that the January effect may be due for a name change, as small-caps have not been keeping pace over the past decade. What happened? One likely possibility is that the very popularity of this anomaly has changed investor behavior. So if recent trends continue, be prepared for the December / February effect.

Here’s their chart:


- The Russell 2000 index was used to measure small-cap stocks.
- The S&P 500 was used to measure large-cap stocks.


Chart of the Day

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

Comments are closed.