Can the January effect be exploited in the market?

Hoarfrost: Courtesy Wikimedia

Introduction

The “January effect,” in common with the “Halloween indicator” and “sell in May and go away”, is a catchy, get-rich-quick investment idea adored by financial commentators because it is so easy to explain to unsophisticated readers. It rests on the claim that the U.S. stock market performs better in January, compared to the other months in the year.

Unfortunately, financial reports promoting the “January effect” are often vague and confusing. One recent example is here, which, like others in this genre, lacks a specific actionable investment strategy. In fact, this particular report does not even

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