The US stock market started off with a whimper, with the average stock fund falling 2.71% in January and the S&P 500 losing 2.53%, according to a news release.
Growth funds were hit the hardest on the month, posting losses of 3.21% on average. The average blend fund lost 2.47%, while the average value fund was down 2.46%. Small-cap equity funds lost 3.11% on the month, while the average mid-cap equity fell 2.56%. The average large-cap equity posted losses of 2.47% in January.
“So far the US market has provided mixed signals about its direction in 2005,” says Sam Stovall, Chief Investment Strategist at Standard & Poor’s in the news release. “The famous January Barometer theory espouses that negative performance in January is typically a bad omen for the remainder of the year, particularly on the heels of two bullish years. However, Standard & Poor’s Investment Policy Committee is forecasting a gain of 7.3% for the S&P 500 this year. The upside potential still remains, even though the market has started the year off on the wrong foot.”