| |
 |
January Effect |
| |
Tendency of US stock markets
to rise between December 31 and the end of the first
week in January. The January Effect occurs because
many investors choose to sell some of their stock
right before the end of the year in order to claim
a capital loss for tax purposes. |
 |
 |
|
|
|
|
|
|
|
| |
Once the tax calendar rolls over
to a new year on January 1st these same investors quickly
reinvest their money in the market, causing stock prices
to rise. Although the January Effect has been observed
numerous times throughout history, it is difficult for
investors to profit from it since the market as a whole
expects it to happen and therefore adjusts its prices
accordingly. |
|
|
|
|
|
Junk Bond |
| |
A bond that pays a high yield due
to significant credit risk. |
|
|
|
