Excerpt of “Why January matters to stock investors with 401(k) accounts” below:
There are two key reasons why stocks tend to rise early in a new year, says David Kotok, chief investment officer at Cumberland Advisors, a Sarasota, Florida-based investment firm.
Investors that were selling stocks late in the prior year for tax purposes finish that process, he explains. In addition, fresh cash becomes available for investment as the calendar turns.
Kotok expects the early-year stock strength “to continue for awhile.”