(Research Project) M.B.A.
The January Barometer is a theory that claims 'As goes January, so goes the year'. Proponents claim that if the stock market rises in January, the year will follow suit. Conversely, if the market falls in January it will end the year lower. This study uses linear regression analysis to determine if January has any greater predictive value of the following 12-month returns than the other eleven months. It tests two stock market indices over four different time periods. The results of the study provided little evidence to show that January, or any of the other months, can predict the direction or magnitude of stock market returns for the coming twelve months.
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