2006-12-22 10:48:20 · 4 answers · asked by Beactive 2 in Business & Finance ➔ Investing
The January effect is an old market timing stratgey that doesn't seem to work anymore.
The way it worked is this:
Investors with a lot of gains would start selling their losers in December to reduce their taxable gains. This would give them a hoard of cash that could be put back into the market in January.
All this money comming back into the market, tended to make stocks rise.
There is still a lot of tax selling in december, which may account for some of the recent declines, but there doesn't seem to be a mass re-entry in January anymore. There have been a lot of theories about why this is, but nobody knows for sure.
2006-12-22 12:36:39 · answer #1 · answered by knihelpu 4 · 0⤊ 0⤋
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2016-12-23 20:36:38 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The January effect is a theory that suggests that if stocks rise in January, it will be a good year in general for the stock market. On the other hand, if stocks fall in January, the yearly trend will be a bad one.
There is no hard (scientific) evidence that this theory is true.
2006-12-22 11:01:55 · answer #3 · answered by Allan 6 · 0⤊ 0⤋
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2014-10-09 19:54:50 · answer #4 · answered by Anonymous · 0⤊ 0⤋