Thursday, February 1, 2018

What Does January Mean?

It's been a great first month of 2018 for the stock market. The Dow Jones Industrial Average rose by 5.8 percent in January, while the S&P 500 index registered a 5.6 percent increase. The Dow produced its best January return since 1989, and the S&P 500 notched its best January since 1997.

That is a good omen for the rest of the year as well. According to the WSJ Market Data Group, on the previous occasions that the Dow has registered a return of 5 percent or more in January, it has closed out that year with a gain 83 percent of the time, or 20 out of the past 24.

The S&P 500 shows a similar pattern. It has finished the year in positive territory 78 percent of the time, or 14 of 18 occasions, when it registers a January return of 5 percent or better.

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