KEY POINTS:
It's not all bad news for embattled New Zealand investors.
Researchers have proved a poor start to the year for the sharemarket does not necessarily signal a bad year ahead - unless you are in the US sharemarket.
Massey University researchers Ben Marshall and Nuttawat Visaltanachoti wanted to see whether the January Barometer - a theory which states that the performance of the S&P 500 in January sets the stock market's direction for the rest of the year - could be applied to other countries.
They studied 23 markets around the world including New Zealand and the US for the period of 1970 to 2007 but found no correlation between the January performance and the rest of the year, except for in the US.
"Although the January Barometer appears to be true for the US markets, for international markets it is not strong at all. Given that we have had a poor start to the year, our results seem to suggest that does not necessarily reflect what the market will be like for the rest of the year," Visaltanachoti said.
Out of all of the markets studied outside of the US they found only Japan and Spain had statistically significant moves in their markets following on from a positive or negative start in January.
Visaltanachoti said the lack of links in other countries put into question whether there was an actual link in the US or whether the correlation was just by chance.
"We are not aware of any institutional reasons why the January Barometer should be so accurate in the US but not in other markets.
"Perhaps it is a matter of chance or perhaps there are some institutional factors in the US that we are not aware of," he said.
