What can the “January barometer” tell us about 2022 stockmarket prospects?

How the stockmarket performs in the first month of the year can often have a bearing on its performance for the remainder. Max King looks at what it’s telling us about its prospects for 2022.

NYSE with father Santa
The Santa Claus rally and the January early warning indicator both bode well – with caveats – for the year ahead
(Image credit: © BRYAN R. SMITH/AFP via Getty Images)

The “January barometer” has been a staple, if declining, investment topic for pundits and journalists for the last 50 years.

This is the hypothesis that, as January goes on Wall Street, so goes the year. It has a strong record of success – at least 75% (depending on the time frame chosen) with few serious errors.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.