- The S&P 500® was down 1.11% in January, bringing its one-year return to 15.15%.
- The Dow Jones Industrial Average® lost 2.04% for the month and was up 6.11% for the one-year period. .
- The S&P MidCap 400® increased 1.45% for the month and 16.59% for the one-year period.
- The S&P SmallCap 600® returned 6.24% in January and had a one-year return of 21.32%.
The takeaway for the opening month of the year was the same as the takeaway from December (or to some degree, of post-March 2020)—neither virus nor politics nor any fundamentals shall keep the market from its appointed rounds of new highs. However, the takeaway did not include anything about a one-day return of -2.57% or a 1.93% decline from web-based social trades (which raised questions like, "What's the matter with kids today?" or "Why is my boy just like me?") Now delivering those first-class highs were individual investors, fed by optimism, and a new breed of younger investors, who can no longer hang out spending their money (ah, the humanity of the emptiness of the bars). So, aided by "fun" web-trading toys, they are "stimulating" the market (did someone say to read the FT (Financial Times), not the newspaper, but the programs of the Fed and U.S. Treasury?) I should note that it takes a lot of small investors to move the market, compared to the assets of money managers, with a sidebar (of more seasoned observers) pointing out that the participation of so many new investors speaks well to the size (but not necessarily the profitability) of future investors (at least for those that survive) and their eventual inheritance. While the market went on its merry way, the last week of January saw volatility increase (and VIX® jump from 21 to 37 in one day), leaving the week (and month) "bloody, but unbowed." The S&P 500 posted significant declines those two days, resulting in a 3.31% weekly decline, the worst week since October 2020 (-5.64%), and turning the monthly gain into a decline of 1.11%, leaving the index down 3.66% from its Jan. 25, 2021, closing high.