What Is The Best Day Of The Week To Buy Stocks?
Are you wondering if there’s a perfect day to buy stocks and boost your investment returns? Many investors have asked, “What is the best day of the week to buy stocks?” While historical patterns and market theories suggest some days might offer slight advantages, our backtests reveal the truth is more nuanced.
In this article, we’ll explore the idea of timing your stock purchases by day, break down popular theories, and share practical insights to help you make informed decisions.
The best day of the week to buy stocks is at the close of Monday.
Understanding the Best Day to Buy Stocks
The notion of a “best day” to buy stocks stems from observed market patterns. Investors often look for days when prices might be lower or momentum higher, hoping to maximize returns. Common theories point to Monday (due to potential dips after weekend news) or Friday (with optimism before the weekend) as favorable days. But do these hold up in practice?
The table below summarizes the best days from 1993 until today for the S&P 500:
| Day | Average Daily Return (%) |
|---|---|
| Monday | 0.04 |
| Tuesday | 0.09 |
| Wednesday | 0.06 |
| Thursday | 0.02 |
| Friday | 0.02 |
Based on our backtests, daily return differences across the week are minimal, except Tuesday. But the margin is small and is not actionable. Market volatility and trading costs like spreads or fees can quickly erase these tiny gains, making day-based strategies less reliable than they seem.
We also changed the backtest a little, and looked at the best days when the prior day was a negative day:
| Day | Average Daily Return (%) |
|---|---|
| Monday | 0.05 |
| Tuesday | 0.22 |
| Wednesday | 0.07 |
| Thursday | 0.01 |
| Friday | 0.04 |
Again, Tuesday stands out, and this is the Turnaround Tuesday effect – which is very strong.
Why Timing the Market by Day Is Tricky
While it’s tempting to pinpoint a single day for buying stocks, several factors complicate this approach:
- Trading Costs: Even small fees or bid-ask spreads can outweigh the minor return differences between days.
- Market Volatility: Days like Monday and Friday often see higher volatility, which can lead to opportunities but also increased risk.
- Unpredictable Events: News, earnings reports, or global events can disrupt weekly patterns, rendering day-based strategies inconsistent.
The theory: Our studies suggest Tuesday offers slightly higher returns, possibly due to bad news being discounted on Mondays.
Conclusion: Is There a Best Day to Buy Stocks?
After backtesting, we’ve found one definitive “best day of the week to buy stocks.”: Tuesdays. The average returns are so good you can make strategies based on it, for example, the Turnaround Tuesday strategy.