There’s a famous saying on Wall Street: “as goes January, so goes the year,” and this adage has more to it than just folk wisdom. When the benchmark S&P 500 has gained in the month of January, it has gone on to close the year higher 86% of the time (according to figures compiled by LPL Research).
So a fall in January 2022 for the US S&P 500 of 5.3% does not bode well for the US stock market this year, or for that matter, the Aussie market.
But we need to be a little bit careful about automatically applying “US experience” to the Australian situation. They actually have a “January effect” caused by the calendar - tax loss selling for their fiscal year ending in December, followed by buying in January as positions are re-initiated.
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