The last time stocks, as measured by the S&P 500 Index, had a January as good as this year, Bill Clinton was being inagurated for his second presidential term, and Un-Break My Heart, by Toni Braxton, was the hottest song on the radio (that thing before the iPod and MP3 players).
Best for S&P 500 Index in Years: What Does It Mean?
Depending upon what historical time frame you study, the stock market has a positive year the majority of the time when January is positive. According to MarketWatch.com, when stocks have risen in January -- 54 times since 1929 -- the year has ended higher 43 times, or 79.6% of the time. This is the support behind the investing mantra, "as January goes, so goes the rest of the year."
In 1997 the S&P 500 rose approximately 28% but I wouldn't count on a repeat in 2013. Back in the late 90's we had "irrational exuberance." I would describe current market sentiment as something between mild anxiety and cautious optimism. At this juncture a 5% market correction would be healthy. This might justify another move higher and perhaps take us in the direction of that positive year that January has "predicted" for us.
What Clinton, Obama, Toni Braxton, the Super Bowl and Stocks Have in Common
Now before you feel nostalgic for the 90's and re-start your momentum investing strategy, don't go guessing that stocks will have another year like 1997 this year. But once we know who wins the Super Bowl, we'll know for sure how stocks will perform in 2013 (sarcasm intended)!