The ‘January Effect’ Doesn’t Hold Up With Stocks. But Bonds Are a Different Story.

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While everybody focuses on the January effect in the stock market, the place they really should be looking is the bond market

The January effect is a theory in financial markets that has existed for 50-plus years. It states that stocks and other assets seem to go up the most in the first month of a year.

But a closer look shows that, for stocks at least, the reverse has been true for the past 20 years. Since January 2000, on average, if you bought U.S. or international stocks at the beginning of the month and sold at the end, you have actually lost a considerable amount of money.

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