As shown in the following graph of Russell index returns for January, 2019, the broad U.S. market earned a sweet 8.6% return, led by an 11.91% return in small growth companies. At the low end of the spectrum, large value companies earned “only” 6.62%. Last year at this time Perry Kaufman documented the history of the January effect and its predictive power for the remainder of the year in his The After-January Effect. It’s a coin flip that came up good this year for all asset classes, not just stocks.
Russell Index Returns for January 2019
In his Major Asset Classes: January 2019 Performance Review, James Picerno reports that all major asset classes had a good January, as shown in the following graph.
One in a row
What are your thoughts? Is this gain a harbinger of more to come, a simple bounce-back from December’s losses, or a sucker tease?
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.