January Effect ?

"Stocks in general and small stocks in particular have historically generated abnormally high returns during the month of January.

According to Robert Haugen and Philippe Jorion, "The January effect is, perhaps the best-known example of anomalous behavior in security markets throughout the world."

The January Effect is particularly intriguing because it doesn't appear to be diminishing despite being well known and publicized for nearly two decades.

Theoretically an anomaly should disappear as traders attempt to take advantage of it in advance. Additionally, many have argued that some of the other anomalies occur primarily or entirely during the month of January (See Interrelationships).

The bottom line is that January has historically been the best month to be invested in stocks."


Quoting an article, I saw on my friend's blog.I am convinced that the january effect does not apply in local context based on past years experience. In fact, the volatility of September and August where projections of the next year are made is nearer to the truth for that matter.



Cheers
Niversphere.