Ignore stocks’ January indicator

There is an adage that "as January goes, so does the year", says Tom Stevenson in The Daily Telegraph. But data shows January's market performance doesn't actually have predictive power. Between 1984 and 2018, the market rose in January on 19 occasions, and continued to rise 15 times.

But on the 16 occasions when the market fell in January, stock still rose throughout the year ten times. "So, the bottom line seems to be that most of the time the market rises." If you need "midwinter cheer, it's the market's... valuation" you should be eyeing up.

As Paul Marshall of hedge fund Marshall Wace told the Financial Times, by some measures the British marketis the cheapest it's been in30 years. The blue chips look a bargain compared with their American and European counterparts. The FTSE 100 trades on 12.3 times next year's earnings, compared with the European Stoxx 600's 13.1 and the S&P 500's 15.9.

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No wonder: British investors rattled by a lack of clarity over Brexit have withdrawn £10.8bn from funds since the 2016 Brexit vote, according to the Investment Association. But in that time, British shares have returned 21%, as Sam Barker and Harry Brennan note in The Sunday Telegraph. Being brave could pay off again now: investors on the sidelines could come storming back once we know what's going to happen, while in any case shares look cheap enough to provide healthylong-term returns from here.