The beautiful thing about the stock market is that there is a never-ending source of opportunity.
Trillions of dollars are constantly on the hunt for one thing: alpha.
Alpha is known as the return of a portfolio over a benchmark.
Searching for the next source of alpha can lead to massive profit windfalls for hedge fund managers and their clients.
These sources are exploited as fast as possible and the investment strategies which reap this alpha are treated like wartime trade secrets.
Today the stock markets are supposed to be efficient.
This means that stock prices accurately reflect publicly available information.
Sometimes, however, there are exceptions.
When these exceptions last for long periods of time, they are known as market anomalies.
The “January Effect” is a Market Anomaly