From the course: Behavioral Finance Foundations
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
The January effect
- [Instructor] The calendar can have a major impact on equity returns, despite the fact that there's no objective rationale for it. In other words, stocks tend to go up or down more in certain months of the year, on average, simply because that month rolls around. The strongest calendar effect is called The January Effect, and it simply refers to the tendency of stocks to go up more than normal in January, compared to a month like February. Let's take a look at what I'm talking about. So I'm here on a white paper put out by Yardeni Research, and this is publicly available so you can certainly go and find it if you're interested. But Yardeni, among other things, investigates the historical returns by months in the stock market overall. Now if we come down to figures one through three, we can use this to illustrate the returns in particular months, so figure one shows us the number of times that a particular month is up or down…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.