Stocks of small companies have a historical tendency to outperform large cap stocks in the month of January.

Question

Quizplus · Accepted Answer

This phenomenon is known as the "January Effect," where small-cap stocks, on average, outperform large-cap stocks at the beginning of the year. This is often attributed to tax-loss selling effects reversing and investors buying back into positions they sold in December for tax reasons, among other factors.

Stocks of Small Companies Have a Historical Tendency to Outperform