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January Almanac:
Still a Solid Month in Post-Election Years

January has quite a reputation on Wall Street as an influx of cash from yearend bonuses and annual allocations has historically propelled stocks higher. January ranks #1 for Nasdaq (since 1971), but fifth on the S&P 500 and sixth for DJIA since 1950. January is the last month of the best three-month span and holds a full docket of indicators and seasonalities, notes Jeff Hirsch, editor, Stock Trader’s Almanac and Almanac Investor newsletter.

DJIA and S&P rankings did slip from 2000 to 2016 as both indices suffered losses in ten of those seventeen Januarys with three in a row, 2008, 2009, 2010 and then again in 2014 to 2016.

January 2009 has the dubious honor of being the worst January on record for DJIA (-8.8%) and S&P 500 (-8.6%) since 1901 and 1931 respectively. The early stages of the COVID-19 pandemic mostly spoiled January 2020 as DJIA, S&P 500, Russell 1000 and Russell 2000 all suffered declines. Only Nasdaq was positive.

In post-election years, Januarys have been modestly weaker. DJIA and S&P 500 slip to number #7 and #6 respectively but do maintain positive average performance. Nasdaq holds the outright best ranking of the five at 5th place, but the frequency of gains has historically been mixed. DJIA, S&P 500 and Nasdaq have all advanced in seven of the last nine post-election year Januarys. The two down post-election years since 1985 were 2005 and 2009.

Editor’s Note: Stock Trader’s Almanac newsletter, edited by Jeff Hirsch, is a digital subscription designed to help active investors implement cyclical, seasonal, and historical market insights with online tools, calculators, alerts and weekly eNewsletter that call out opportunities as they happen. Receive FREE the 2021 Stock Trader’s Almanac when you subscribe to the digital service, Almanac Investor. The 54th Annual Edition shows you the cycles, trends, and patterns you need to know in order to trade and/or invest with reduced risk and for maximum profit. For more information on the Stock Trader’s Almanac newsletter.

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