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%.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 1929-01-31 | -1.6% | -9.4% | -58.5% |
| 1930-01-31 | +3.3% | -28.7% | -61.6% |
| 1931-01-30 | +7.1% | -49.2% | -10.9% |
| 1933-01-31 | -15.8% | +62.7% | +68.3% |
| 1934-01-31 | -1.4% | -20.4% | +10.7% |
| 1936-01-31 | +4.7% | +24.9% | -30.3% |
| 1937-01-29 | +4.4% | -38.7% | -51.5% |
| 1938-01-31 | +6.2% | +15.8% | +1.1% |
| 1942-01-30 | -3.8% | +18.9% | +79.4% |
| 1943-01-29 | +5.2% | +13.3% | +34.6% |
| 1944-01-31 | +0.2% | +13.7% | +24.3% |
| 1945-01-31 | +6.2% | +37.7% | +27.5% |
| 1946-01-31 | -7.0% | -14.8% | +18.5% |
| 1947-01-31 | -1.6% | -10.6% | +51.6% |
| 1949-01-31 | -3.6% | +13.2% | +69.6% |
| 1950-01-31 | +1.4% | +28.8% | +117.9% |
| 1951-01-31 | +0.6% | +11.3% | +101.6% |
| 1952-01-31 | -1.9% | +9.4% | +81.5% |
| 1954-01-29 | +0.9% | +38.8% | +112.6% |
| 1955-01-31 | +1.4% | +19.6% | +52.8% |
| 1958-01-31 | -1.4% | +32.4% | +59.0% |
| 1959-01-30 | +1.4% | +0.3% | +38.8% |
| 1961-01-31 | +3.4% | +12.1% | +49.8% |
| 1963-01-31 | -2.2% | +16.3% | +39.8% |
| 1964-01-31 | +1.5% | +13.7% | +28.6% |
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.