January wasn't kind to investors in 7 of the last 10 years

Investors need to watch out for nasty surprises in January, as markets have generated negative returns in seven out of ten times that month over the past ten years. Moreover, January returns have ranged between a negative 0.06% and 2.5% in five straight years from 2019 to 2023. Recent rollover data, which suggests that traders have carried forward heavy bullish bets at steep levels, adds to the risk.

- Gopika Gopakumar

The Nifty has generated negative returns in January, ranging from a negative 0.06% to 4.78% in 2014-2023. The years in which positive returns were generated that month include 2015 (6.37%), 2017 (4.6%) and 2018 (4.76%). Those months also tended to be marked by huge volatility.

For instance, volatility index India Vix, which measures traders’ perceptions of near-term market swings , jumped a whopping 61% between a low of 13.15 and a high of 21.21 in January 2015. A higher Vix reflects rising uncertainty about market direction, while a falling Vix reflects more bullishness.