http://www.getmoneyenergy.com/2010/01/seasonal-investing-rules-thejanuary-effect/ DRIP Investing for Dividend Growth, Cashflow and Financial Freedom Sun, 25 Jul 2010 02:34:50 -0600 http://wordpress.org/?v=2.8.4 hourly 1 http://www.getmoneyenergy.com/2010/01/seasonal-investing-rules-thejanuary-effect/comment-page-1/#comment-3366 Early Retirement Extreme Tue, 26 Jan 2010 07:39:10 +0000 http://www.getmoneyenergy.com/?p=4914#comment-3366 I'm sure some mathematician can prove me wrong or show this more accurately, but suppose we have 100 years of data. Now we look at the beginning of January and the end of January. That's 50 degrees of freedom. Now we pair that to the performance of the rest of the year. We're down to 25. I take the square root of this which is 5, so the chance of this effect being completely random is 20%. Not entirely rigorous but enough not to use it as a trading strategy. I’m sure some mathematician can prove me wrong or show this more accurately, but suppose we have 100 years of data. Now we look at the beginning of January and the end of January. That’s 50 degrees of freedom. Now we pair that to the performance of the rest of the year. We’re down to 25. I take the square root of this which is 5, so the chance of this effect being completely random is 20%. Not entirely rigorous but enough not to use it as a trading strategy.

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