The S&P 500 Index was down 3.46% in January. There’s a saying that goes something like “As goes January…”
Well, based on history, that’s not necessarily true. Take a look at the following two graphics. The first one is all the returns (these are total returns) for the month of January listed in order from worst to best. The other column shows the total return for the remainder of that year (February – December). The second graphic summarizes those results, looking only at the Januaries with negative returns.
Of the 33 Januaries with a negative return, 18 of them were followed by a positive return for the remainder of the year. Interestingly, of the 56 Januaries with a positive return, only 11 of them had a negative return for the February – December that followed.
Basically, January’s return doesn’t mean too much when it’s negative&151;at least as far as I have looked at it. I’m sure the results hinge more on where the January return is in a market cycle (not good for January 2014 if you look at 2013’s amazing year).
Anyway, I post the info and you form your own opinions.