Fun Facts about Forecasting the Markets and more
- by Monica J. Weissmann, CFP, CIM, MEE
It is 2024 – and yes, it is January
There is a phenomenon called the "January Effect." The “January Effect” is a perceived tendency of the stock market to experience an upward trend during the month of January. This is often attributed to factors such as tax-related selling in December, which can lead to lower stock prices, followed by a potential rebound in January as investors buy back stocks.*(link to source)
Sell in December, buy in January – easy, right? But not everything is as easy as it looks from the first sight: while the “January Effect” has been observed over the years, it's essential to note that it is not a guaranteed or foolproof strategy for investors. Market behavior is influenced by a wide range of factors, and trends may not always follow historical patterns. Investors should approach market forecasting with caution and consider multiple indicators and analysis methods for making informed decisions.*
How short your skirt will be in 2024?
You would wonder how skirt length is related to the market fluctuation? Apparently, it is! The "Hemline Index” is a theory that suggests that the length of women's skirts is somehow correlated with the performance of the stock market. According to the “Hemline Index”, when skirts are shorter, it indicates optimism and a bullish market, while longer skirts suggest pessimism and a bearish market.*
The "Hemline Index” concept was first proposed by economist George Taylor in the 1920s. While it may sound amusing, the “Hemline Index” is not a reliable or scientifically proven indicator of market movements. But, nevertheless, it is interesting to see what fashion experts are saying about skirt length in 2024.
From a Theory to Reality
Transitioning from entertaining market outlooks to actionable steps involves more than just a few theories. For each of us it is a process of analyzing personal situations, financial data, goals and even dreams, and translating it into practical strategies.
Where do you start? – if you are thinking about it, it’s already a very good beginning! You have $0 dollars saved or you maximized your TFSA – it’s never too late to start plan.
Do you need help? Can you do it yourself? How about reading the numerous articles published in the media by all reputable economists? Remember, all the articles published by the media are general guidelines, and individual circumstances vary, and your friend’s advice is the best for your friend’s situation, but not for you.
If you're uncertain about what steps to take, consider consulting with a financial professional who can guide you and provide advice according to your situation.
*References
https://www.thestreet.com/dictionary/january-effect
https://economictimes.indiatimes.com/news/economy/unconventional-economic-indicators-that-might-surprise-you/hemline-index/slideshow/94961921.cms
