Home Guides & Resources chevron_right Investing Chart of the Week: Should You Heed the January Barometer? Published January 31, 2022 Jeffrey DeMasoPortfolio Manager With the S&P 500 on pace to notch a loss in January, prepare to see a lot of articles citing the “January Barometer.” The idea behind this old Wall Street fairy tale is: “As goes January, so goes the entire calendar year.” Ignore all of this nonsense. Since the S&P 500 index’s 1957 launch, it has etched a January decline 26 times—not counting January 2022. In only 12 of those instances—or less than half the time—did the S&P go on to record a negative calendar-year return. And note that by including those negative January returns in my calendar-year calculations, I’m giving this measure a head start. Historically, 14 out of 26 times, a negative January was a “false alarm”—meaning that if you sold because the market was down in January, you had better than 50/50 odds of missing out on gains. If only market timing was that easy! Note: Chart shows the number of times the S&P 500 index had a negative index-level return in the month of January from 1957 through 2021, as well as the number of years with positive and negative returns following a down January. Sources: S&P Dow Jones Indices, Adviser Investments. This material is distributed for informational purposes only. The ideas and opinions contained herein should not be viewed as recommendations or personal investment advice. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. For a summary of Adviser Investments’ advisory services and fiduciary responsibilities to our clients, please review our Form CRS here. © 2022 Adviser Investments, LLC. All Rights Reserved. Tags: Chart of the WeekJeff DeMasomarket timingS&P 500The January Barometer