Read with interest some reaserch regarding the month of January (and the first 5 trading days of the year) being a good reflection on avaerage returns for the entire year. The research was performed on the S&P500 and seemed to be compelling over the last 30 odd years.
I decided to have a look at the last 12 years (2002-2013) of the ASX200 to see if a similar effect was going on here.
The results were mixed. Regarding the month of Jan being a good indicator, only 7 out of 12 years had a positive correlation between average returns in Jan vs average returns over the entire year (Data was daily returns from yahoo finance).
However for the first 5 trading days in Jan, 10 out of 12 years were correlated (which is a little more interesting)
Behavioural finance in all it's glory. People start like they want to finish. In that case, battern down the hatches for a negative 2014.
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