The best month to buy stocks

THERE is an old stock market adage that says – as January goes, so goes the rest of the year. It is probably one of the oldest stock market sayings around, dating back to 1942. It is arguably one of the most contentious, too. How, for instance, can something that has happened in the first 31 days of a calendar year determine what will happen in the following 334 days?

However, if we believe the so-called January barometer effect, then stock market investors could be in for a treat this year. This is regardless of what might happen on the geopolitical front, at a macroeconomic level, or what central banks might do. In the first two weeks of trading this year, the Dow Jones Industrial Index has gained 3.5 per cent. In the broader market, the S&P 500 has improved 4.2 per cent, while the tech-heavy Nasdaq has gained 5.9 per cent.

It hasn’t only been the US markets that have enjoyed a good start to the year. In the United Kingdom, the FTSE100 has jumped 5.2 per cent. In Asia, the Hang Seng Index has surged by a whopping 9.9 per cent; South Korea’s Kospi has risen 6.7 per cent; and Australia’s All-Ordinary has climbed 4.1 per cent. The Straits Times Index is up 1.3 per cent.