The City has no shortage of sayings. The one regarding the first month of the year is “As January goes, so goes the trading year”. Like most sayings, it was coined in a distant time when the stock market would be unrecognisable to most investors today. However, there is recent evidence to substantiate this claim. Good Januaries especially predict good stock years. For all years between 1984 and 2021, the FTSE 100 has finished the year higher 90% of the time when the market rose in January. In addition, Up Januaries are good for above-average returns. The FTSE 100 has averaged capital appreciation (before dividends) of 6.8%. In years in which both January and the full year were positive, the FTSE 100 saw average capital appreciation of 17.6%. The FTSE 100 rose 1.1% this January, a good sign for stock market investors.
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