Calendar Effect

Calendar Effect - A calendar affect is when the stocks in the stock markets and stock exchanges have a tendency to perform differently during different times of the year. An example of this is the January Effect, which is when the stocks tend to rise between Dec. 31^st and the last day of the first week in January. This effect occurs because it is at this time of year the many investors decide it is time to sell off some of their stocks on Dec. 31^st in order to claim a capital loss on their taxes, only to reinvest the money the during the first week in January, which caused the prices to rise.