The S&P 500 is off to a positive start in 2026, up nearly 2%, potentially setting the stage for a strong first month. However, January’s performance does not always predict the rest of the year, with a moderate correlation of 0.42 over the past 30 years. Extreme January performances can lead to crashes, so investors should remain cautious.

Historical data shows that a bad January can lead to the worst annual returns, while a good start often results in positive overall performance. Market crashes, such as in 2020, can happen suddenly and without warning, emphasizing the need to protect and diversify portfolios. Focusing on dividend stocks, utility stocks, and value stocks can help mitigate risk.

It is challenging to predict market crashes, making it crucial to take preventive measures to safeguard investments. Diversifying and focusing on value stocks can help reduce vulnerability. While a strong January start can be promising, it is not a guarantee of a good year overall. Consider potential risks and strategies to navigate market uncertainties.

Read more at Yahoo Finance: Does a Strong January for the S&P 500 Mean a Good Year for the Market? Here’s What History Says.