The January Effect: An Empirical Test of the Existence of a Stock Market Anomaly

Authors

T. Lance Toler, Brigham Young University
Dr. Steven R. Thorley, Brigham Young University

Keywords

January Effect, small-cap stocks, stock market anomaly

College

Marriott School of Management

Department

Finance

Abstract

The idea of capitalism is based on the theory of an efficient market, or of an “invisible hand” that works tirelessly to distribute resources in the most efficient way. The stock market version of this idea is called the Efficient Market Hypothesis. This idea claims that all available information is absorbed immediately into the prices of stocks. Stock market anomalies, or any predictable patterns for high or low stock prices, therefore, should not exist. If any anomalies appear to be persistent, this suggests the market is not completely efficient.

Recommended Citation

Toler, T. Lance and Thorley, Dr. Steven R. (2013) "The January Effect: An Empirical Test of the Existence of a Stock Market Anomaly," Journal of Undergraduate Research: Vol. 2013: Iss. 1, Article 2431.
Available at: https://scholarsarchive.byu.edu/jur/vol2013/iss1/2431