Folks, I was planning on taking the week off from this link, as I
was supposed to be gallivanting around Taiwan. Alas, thankfully
I”m not over there. But in light of recent events, I need a little
break from the classic pieces I have filled this space with, and so
I turn to my own research, as well as that of Yale Hirsch, for
something that is at least a little different, even if it”s probably
totally worthless.
What”s the best, or worst, day of the week to be trading stocks?
In Yale Hirsch”s “2001 Stock Trader”s Almanac,” he notes that
between 1952 and 1989 Monday* was the worst trading day of
the week for the S&P 500. This was what all of us who started
our careers on Wall Street during that era were taught (mine
began in 1982).
*[Including Tuesday, when Monday is a holiday.]
On the other hand, Friday was the best, with the market rising
57.6% of the time. [Including Thursday when Friday was a
holiday.]
But starting in 1990, Monday became the best day, and Thursday
the worst. [January 1990 – December 1999, though my own
research would seem to verify this also holds since 12/31/99.]
Separately, I have been jotting down the daily close of the S&P
500 since 1/1/97 and have come up with a little different twist.
[Sorry, this is literally on sheets of legal paper, so I can”t email it
to you.]
What I do is highlight each day where the S&P 500 declined 1%
or more. Going back to my days in the fund business, this was
important because if, for example, you held a fund with a net
asset value of $20.00, and you saw it decline more than 20 cents
when you picked up the morning paper, you might be a little
upset. Granted, I started tracking this when 1% moves were still
fairly uncommon. By the summer of ”97, however, they almost
seemed to become the norm.
So here”s the deal. For the period 1/1/97-9/20/01, the number of
daily 1% declines in the S&P 500 are as follows.
Monday – 26 individual days
Tuesday – 40
Wednesday – 43
Thursday – 50
Friday – 42
And just for the heck of it.for 2001, again, through 9/20.
Monday – 7 days with a 1% decline in the S&P 500
Tuesday – 9
Wednesday – 12
Thursday – 7
Friday – 11
While I don”t keep the figures for Nasdaq, Yale Hirsch tells us
that for the period 1971-1989, Monday was the worst day and
Friday the best, just as with the S&P 500. For the period 1990 –
June 2000, Wednesday is the best and Tuesday the worst. Of
course, this latter period misses all but 3 months of the Nasdaq
Crash we have witnessed since 3/00.
Going forward, you wouldn”t expect Fridays to be particularly
good, since no one will want to be too aggressive going into a
weekend with the potential for bad news on the war front.
And one last tidbit, simply from a historical basis, concerns
the period 1990-1991. Iraq invaded Kuwait on August 2nd of ”90
and Mondays were up 67.9% of the time that year. But Thursdays
were up only 40.0%. Then in 1991, Mondays were up just 44.2%
and Thursdays 49.0% [Fridays rose 51.9% of the time that year.]
Next week, I will attempt to get back to the Ulysses S. Grant
story that I started a few weeks ago. Thanks for your patience
and understanding.
Brian Trumbore
