As goes January, so goes the year, according to the Stock Trader’s Almanac. And as the first five days of month go, so go January’s full-month returns. So we should be rooting for a good start to 2012, right?
Well, the devil is always in the details.
Since 1950, the S&P 500 has started January with five-day gains 38 times. Full-year gains followed the positive starts 33 out of those 38 years (or 87% of the time). When the market started a new year with a loss for the first five days of January, full-year performance was mixed. Stocks rose 12 times and fell 11 times for an average annual gain of 0.2%.