New Research On The January Effect

I just found this new paper on the January effect. Thank you finance professor!

Click Here To Read The Paper & Finance Professor’s Analysis Of This January Effect

Article Comments & Introduction (Finance Professor Blog)

“You probably have all heard of the January effect. It is the historical fact that stocks have done better in January than in other months. That much all researchers agree on. Why? That is a very good question. Some seems to be taxes, some size, but now Fink, Fink, and Godbey find that the age of the firm also matters. Specifically young firms out perform old firms in January even after controlling for size and other factors.”

Abstract (Jason Fink, Kristin Fink, Jonathan Godbey @ Via SSRN )

For decades the finance profession has noticed the tendency of equity prices, most noticeably for small stocks, to rise in value in the month of January. The small stock January effect appears to have been significant over the last thirty five years. However, we demonstrate that even after controlling for both the size of the firm and systematic factors, young firms experience significant and abnormally positive January returns. This age effect has several possible sources, including firm level information uncertainty in January or increased investor demand related to young firms.

Click Here Read A New Scholarly Paper On The January Effect

Click Here To Read Finance Professor’s Analysis Of This January Paper