Is there a "January Effect?"


If you have a 401k January could be a big month for you. Many think Wall Street's performance this month signals how it'll do for the entire year.

Andrei Costas at Houston's STA Wealth Management says it's not an exact science, but since the 1950s it's been pretty reliable.

"About 29 times we've seen January finish up higher and 93% of the time we've actually seen full year gains."

Costas tells his clients to diversify their portfolios.

"Not only domestic equity exposure but also looking outside of the U.S.; looking at both emerging markets and developed international."

Costas has a warning.

"When you have optimism we have a tendency of overshooting, really, in both directions so increased optimism certainly might provide a backdrop to volatility if we do get any disappointments."

Critics point out there was no "Santa Claus Rally," but the early days of trading in the New Year were up.


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