January Effect: Does It Still Work? Best January Stocks
November 3, 2026
The January effect is one of the oldest ideas in market seasonality: small-cap stocks should outperform large caps in January, often explained by investors buying back after year-end tax-loss selling. We tested it against 15 years of adjusted prices, 2011 to 2025.
Does the January effect still work?
Not over this period. Using IWM (the Russell 2000) for small caps and SPY for large caps:
| ETF | January avg return | Rose in (15y) |
|---|---|---|
| Nasdaq-100 (QQQ) | +2.23% | 11 of 15 |
| S&P 500 (SPY) | +1.28% | 9 of 15 |
| Dow 30 (DIA) | +0.93% | 9 of 15 |
| Russell 2000 (IWM) | +0.77% | 8 of 15 |
IWM beat SPY in only 6 of 15 Januaries, and in 2 of the last 5. On average it trailed by about half a point. It can still win big when it does win, as in 2021 (+4.85% against −1.02%), but it has also lost big, falling 9.53% in January 2022 against SPY’s 5.27%. Small caps have had bigger January swings than the S&P 500, not better results.
Best seasonal stocks for January
Individual stocks have been much more consistent than the indexes. We scanned the S&P 100 and major ETFs for bullish windows that start in January, with at least 13 years of data, an average return of 2% or more and a win rate of 75% or more. 73 of 115 qualified. All ten below rose in 14 of 15 years:
| Stock | Window | Avg return | Rose in (15y) | Worst year |
|---|---|---|---|---|
| Nvidia (NVDA) | Jan 21 – Feb 20 | +9.79% | 14 of 15 | −0.51% |
| Booking (BKNG) | Jan 31 – Feb 20 | +8.07% | 14 of 15 | −0.91% |
| Micron (MU) | Jan 31 – Mar 2 | +7.23% | 14 of 15 | −6.42% |
| Broadcom (AVGO) | Jan 27 – Feb 16 | +5.99% | 14 of 15 | −0.76% |
| GE Aerospace (GE) | Jan 25 – Feb 24 | +4.49% | 14 of 15 | −9.70% |
| Alphabet (GOOGL) | Jan 3 – Feb 2 | +4.24% | 14 of 15 | −12.07% |
| RTX (RTX) | Jan 16 – Feb 15 | +4.23% | 14 of 15 | −2.42% |
| Costco (COST) | Jan 18 – Feb 17 | +4.15% | 14 of 15 | −0.94% |
| JPMorgan (JPM) | Jan 21 – Feb 20 | +4.13% | 14 of 15 | −1.01% |
| Adobe (ADBE) | Jan 13 – Feb 2 | +3.58% | 14 of 15 | −0.40% |
Full histories and the live status of each window: NVDA, BKNG, MU, AVGO, GE, GOOGL, RTX, COST, JPM, ADBE.
What the numbers suggest
- The strength is late in the month. Most of the strongest windows open in the second half of January and run into February, not on January 1.
- Earnings season overlaps. Many of these windows span fourth-quarter results, so earnings reactions are likely part of the pattern.
- Technology leads January. QQQ has the strongest January of the four indexes, up in 11 of 15 years.
Also see December seasonality and the Santa Claus rally.
See every seasonal window starting in January.
Best seasonal stocks in JanuaryPast seasonal performance does not guarantee future results. Win rates and average returns are historical base rates, not predictions. This is for informational purposes only and is not financial advice.
Keep reading
ETF Seasonality: The Best Month for Every Sector ETF
September has been the worst month for 11 of the 15 ETFs we tested, and November the best for 7. But energy, utilities, gold and bonds march to a different calendar.
AMZN Seasonality: Amazon Stock's Best and Worst Months
Amazon's mid-June to mid-July window has risen every year since 2011. Yet December, its big shopping season, has been its weakest month. Here's the AMZN seasonal record.