With the end of the year rapidly approaching, it’s time for us to look inside our collective, metaphorical wallets and consider the financial decisions we’ve made in the past year. What can we do to be better savers in the next year?

Much like how we take time to improve ourselves at the end of the calendar year, so too must we improve our financial prospects.The end of the year is a special time, too, for certain investment vehicles. Not the least of these are mutual funds.

Market timing — buying stocks during certain months, days, or hours that are rumored to yield higher returns — is generally considered to be hokum among experienced investors. Advice on market timing is the sort of thing relegated to the seedy underbelly of the investing world: newsletters, spam emails about penny stocks, and the like. There is one particular market timing argument surrounding the end of the year that warrants some discussion, and that is the so-called “January Effect.” The January Effect, like most market timing strategies, is either a real thing or a completely fake thing.

The argument here is that at the end of the year, people sell off losing investments to lock in capital losses to offset their tax liabilities, and some sell off stocks and equities to fund their holiday shopping. Either way, there are a lot of reasons to sell at the end of the year, which drives stocks lower in December, leading to a bump in January when investors repurchase the same stocks at a discount. And the January bump is notable according to most, but that doesn’t necessarily mean you can make money off of it.

In fact, some attribute the January Effect to mutual funds themselves. This is the “window dressing” argument for the January Effect, which makes the case that some mutual funds clean up their portfolios around the end of the year by getting rid of riskier investments, and by doing so, making them look more attractive to investors in the process. Then they repurchase the risky assets again in January leading to the bump.

But you don’t need nonsensical market timing argument to consider the end of the year or the beginning of the next a good time to consider investing in mutual funds. Here’s a couple reasons why:

1. End of the Year Clarity: In the middle of the year, you have no idea what the future will hold. Will you be unemployed? Will you have to take your cat to get some absurdly expensive medical procedure? Will America’s economy implode? The end of the year provides a bit of certainty for your finances that other points of the year cannot. You know how much money you’ve saved; you’ve done your holiday shopping; you have a rough sense of what your tax liabilities will be, etc. You know if you have money left over to make an illiquid investment, and whether that would be wise for you or not.

2. Dividends and Capital Gains Distribution: Federal regulation requires that funds distribute their gains to their investors at least once a year. Some funds only distribute once a year, at the end of the year. So if you purchase a share before the “record day” — the day when the dividends are distributed — you will get that cash (if there is any) and you’ll be liable for the taxes on it. So, waiting until after the gains are distributed is a wise idea, unless you want to add to that tax bill you’ll be paying in April. Look into a fund’s distribution calendar before committing.

3. Tax Deferral: On the other hand, some mutual funds can be held in tax-deferred accounts, like your 401(k), meaning that the end of the year is a perfect time to invest. Around the end of the year you should have a sense of whether you’ve maxed out your contributions to these tax-deferred accounts, and if you haven’t you probably should.

Overall, though, the biggest factors in the market are economic and political circumstances, and these are things to seriously consider when looking into investing in mutual funds, especially equity funds. But the end of the year does provide a few good opportunities for considering whether to make an investment or not, regardless of market timing.

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