January woes & whingers
The most volatile January stock-market in recent Wry & Dry memory was almost matched this week by the elevation of Australia Day to a Whingers' Day. On the latter, W&D is now thinking of commencing a media campaign next 26th January, joining what has become an annual whinge-a-thon, and to bemoan the wilful neglect of that determinant of Australia's national character: shiraz. Good grief, nowadays, it's all about tempranillo or sangiovese. What about the muscular Aussie red! And what is the govmnt going to do about it?
But W&D digresses from the other red. Red ink. That is what January in the stock-market looked like. At -5.9%, it's the worst January since 2008, when the All Ordinaries Index returned -11.3%.
But, W&D hears readers ask so what? What does it say about the rest of the fiscal year?
Well, not much. W&D dusted off the abacus and has discovered that in 66.1% of the years since 1980, January has had the same return direction as that fiscal year. Hmm.
But interestingly, in the 14 years that January was negative, the fiscal year outcome turned around and was positive 50% of the time. W&D cautions readers not to get excited about these stats, though, as they do not tell you what had happened in the first half of each fiscal year. FY-16, to the end of December, had returned -1.9%. And hence -7.8% to the end of January. For the share-market index, a positive FY-16 looks, well, difficult.
And, as always, W&D advises to look at your own investments. It is that that matters, not the market.