In my previous article, I explored the January effect and whether the STI tends to rise in the first month of the year. From my data, it seems that is indeed the case. The STI climbed higher in January for 15 out of the last 26 years. In this article, we’re going to explore the January barometer and whether it holds true for the STI.
The January barometer is a hypothesis that if the stock market rises in January, it is likely to continue rising for the rest of the year. Similarly, if the market falls in January, it is likely to close lower for the year. Sounds like hocus pocus but is it true for the STI? Furthermore, I also wanted to find out what your average returns would be if you invested in the STI for the entire year only in the years the market rose in January. Would ......