Replies to post #22031 on EVIO Inc (EVIO)

[User-65225]

January Effect: Some of my biggest all time pennyland gains bottomed/started to run end of December, then peaked in January.

My assumption is that its due to financiers going on vacation and not sitting on these stocks, at the same time people are repositioning in the stronger ones that were beaten down due to end of year selling... They are getting a jump start on the "January effect" buyers

Once momo starts, it can make it hard to snag cheapies near the lows... One has to be slightly ahead of the masses if they want to make the biggest gains in the markets. This is why im buying now. I see little downside from here near term, compared to the upside potential in January...

What is the 'January Effect'
The January effect is a seasonal increase in stock prices during the month of January. Analysts generally attribute this rally to an increase in buying, which follows the drop in price that typically happens in December when investors, engaging in tax-loss harvesting to offset realized capital gains, prompt a sell-off. Another possible explanation is that investors use year-end cash bonuses to purchase investments the following month.

BREAKING DOWN 'January Effect'
The January effect is a hypothesis, and like all calendar-related effects, suggests that the markets as a whole are inefficient, as efficient markets would naturally make this effect nonexistent. The January effect seems to affect small caps more than mid or large caps. Since the beginning of the 20th century, the data suggests that these asset classes have outperformed the overall market in January, especially toward the middle of the month.
Investment banker Sidney Wachtel first noticed this effect in 1942. This historical trend, however, has been less pronounced in recent years because the markets seem to have adjusted for it. Another reason analysts consider the January effect less important as of 2016 is that more people are using tax-sheltered retirement plans and therefore have no reason to sell at the end of the year for a tax loss.

Beyond tax-loss harvesting and repurchases, as well as investors putting cash bonuses into the market, another explanation for the January effect has to do with investor psychology. Some investors believe that January is the best month to begin an investment program or perhaps are following through on a New Year's resolution to begin investing for the future.