A Resolution to Catch the 'January Effect'
The January bounce.</br></br>Trying to catch it is a favorite pastime of small investors. It is also a game two of the contestants in this month's stock-picking contest want to play.</br></br>Traditionally, certain stocks that have declined during the year get hammered further in December, as investors wishing to soothe their investment pain sell to record a tax loss. Stocks issued by small companies are usually most affected, and many of them bounce back in January like rubber balls.</br></br>This is the stock market's celebrated "January effect." It isn't a sure thing. Some years it doesn't happen at all, and some years much of the bounce happens in late December. But it happens often enough to be part of Wall Street lore and investment strategy.</br></br>Betting on a January bounce in this month's stock-picking contest are two money managers: Lois Burleigh, director of equity investments for ASB Capital Management Inc. in Washington, D.C., and Randall Ely, president of Edgar Lomax Co. in Alexandria, Va.