January Barometer
As January goes, so goes the year
The January Barometer (Yale Hirsch, 1972): when the S&P 500 is positive in January, the full year has been positive approximately 85% of the time. When January is negative, the full-year hit rate drops to approximately 50%.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Since 1950, a positive January has been followed by a positive full year roughly 85% of the time with average full-year return of approximately +16%.
Negative Januarys have been followed by positive full-year returns about 50% of the time. The signal is weaker for down months but still valuable as a risk-management flag.
January sees the largest inflows of the year (new-year allocations, bonus investments, IRA contributions). Strong January flows create momentum that tends to persist.
January's signal is asymmetric in practice too: a weak month is a reasonable prompt to confirm your allocation still matches your written risk tolerance, while a strong one is not a license to add risk — let your annual rebalance, not the calendar, set position sizes.