Citadel Securities says big money to flow into stocks this month
The first three trading days of January have been positive for the S & P 500 , and that could be a sign there’s more to come the rest of the month. According to data from Citadel Securities, January is historically the strongest period for new capital to be deployed into stocks. In fact, January typically has the highest average monthly equity mutual fund purchases as a percentage of assets under management, dating back to 1984. Not only that, since 1928, the S & P 500 has been positive in January 62% of the time. Additionally, the Nasdaq 100 has been up 70% of the time going back to 1985. “January marks the year’s most active allocation window of the year,” Scott Rubner, Citadel Securities’ head of equity and equity derivatives strategy, wrote in a note. “As markets reopen after the holiday pause, capital tied to retirement contributions (401k, 529), year-end bonuses, and discretionary [private wealth management] mandates moves quickly from cash into passive risk assets.” This so-called January effect — in which markets rise amid an influx of cash and after tax-loss selling at the end of the prior year stops — could be a contributing factor as to why the broader market has recorded solid gains in the first three trading days of January even as the U.S. has attacked Venezuela and captured its leader, Nicolás Maduro. The S & P 500 hit a fresh all-time intraday high on Tuesday, while the Dow Jones Industrial Average closed above 49,000 for the first time. The Dow has gained about 3% in the early going this month, while the broad market S & P 500 and the Nasdaq Composite are both up more than 1%. .SPX mountain 2026-01-01 S & P 500 performance since the start of January Volatility has been low as well. The CBOE Volatility Index currently sits just above 14.5 after dipping below 14 in the lead-up to the Christmas holiday. Rubner also noted that the S & P 500’s one-month at-the-money implied volatility hit a one-year low on Dec. 26. Individual investors’ enthusiasm for stocks — not to mention earnings momentum broadening beyond the ” Magnificent Seven ” — also supports the idea that billions of dollars of new money will find its way into the market this month, the equity head said. “The defining feature of retail activity in 2025 was persistent, directional bullishness, expressed through options with notable scale and consistency,” Rubner wrote. “After earning more than $20 billion in options on our platform over the course of the year, retail investors enter January armed with capital to deploy.”
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