Stock Market 'January Effect' Ain't What It Used To Be

Investing.com - A hot stock market in January may have some investors counting on a big year.That's because the so-called January effect dictates that what the market does in January determines its performance for the whole year.Though that is largely true over the last century, the market's performance in the past 10 years casts some doubt on that Wall Street forecasting tool.Since 2009, the market's performance has been evenly split in January and that's during the second longest bull market in history.Most recently, in 2017, the market did close higher in January-- though just marginally so -- beginning one of the best years ever.But in four other years, the market lost ground in January and still managed to end the year in positive territory.For instance, January was a brutal month in 2009, when the market began its decade-long rally, but finished the year with a 20%-plus gain.Only once in the past ten years has the market been negative for both January and the full year.So, even if the market reverses course and ends the month lower this year, there's reason for investors to be hopeful.