The January Effect: What it is & why investors should care

The January Effect is a term that some financial market analysts use to  classify the first month as one of the best-performing months,  stock-wise, during the year.

What Is the January Effect?

The January Effect is a phenomenon in which stocks supposedly perform well during the first month of the year.

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Tax-Loss Harvesting

With tax-loss harvesting, investors can lower their taxable income by  writing off their annual losses, with the tax timetable ending on  December 31.

A Clean Slate for Consumers

U.S. consumers, who have a robust say in how the American economy will perform, traditionally view January as a fresh start.

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Portfolio Managers May Buy In January

Like consumers, January may give mutual fund portfolio managers a chance  to start the year fresh and buy new stocks, bonds, and commodities.


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