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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

957.0. "January effect?!" by HDLITE::PASHAPOUR (Disk space, the final frontier) Tue Jan 02 1996 14:06

    I heard last year, on Friday, that the "January effect" no longer
    exists.  What is this thing?  My friend says it means one has to pay taxes
    on gains quarterly. Therefore, the stocks are not going to be sold
    early in January.  That does not make sense to me.  
    
    Thanks.
    
    Amin
T.RTitleUserPersonal
Name		DateLines
957.12155::michaudJeff Michaud - ObjectBrokerTue Jan 02 1996 14:5013
	Well first off you forgot to check for an existing topic (tsk tsk):

   796  DANGER::LEAHY        27-NOV-1994     1  january effect on the dow

	Unless I'm confusing the so-called "effect" with another one,
	the Jan. effect is due to stock prices being under selling
	pressure at year end as investors sell-off their losers in
	time to offset realized gains from the rest of the year (I
	did this this the last couple of weeks).  Then those same
	stocks that no longer have that selling pressure have a technical
	recovery come the new [tax] year.

	Some say the effect is more prevelent on small-caps.