One explanation for the January effect is that tax-induced sales in December temporarily depress prices, and these prices tend to recover in January.

Name: One explanation for the January effect is that tax-induced sales in December temporarily depress prices, and these prices tend to recover in January.
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The January effect suggests that stocks often rise in January due to investors selling off stocks in December for tax purposes, leading to a temporary price drop that rebounds in the new year.

One Explanation for the January Effect Is That Tax-Induced Sales