The performance of world stock markets this year has done little to inspire investor confidence and one often-used indicator is signalling that the prospects for shares are unlikely to improve just yet. The so-called January Barometer - which is based on the premise that the performance of major market indexes in January foreshadows how they will fare in the full year - is flashing a warning sign about stocks' performance for 2000.

The January Barometer has gained a wide following among investors because it has been accurate about 80 per cent of the time since 1950. But just because the January Barometer has had a highly accurate predictive record, historically, does not mean it should be viewed as gospel.

Some market historians think the January Barometer's negative reading this year will be outweighed by the positive signal coming from another market gauge which suggests that historically, stocks have done very well in presidential election years, particularly in the second half of those years.