By examining the statistics of the last 95 years, it is clear which days are more convenient to invest on Wall Street.
Financial markets are extremely volatile and thrive on emotion and seasonality. So are the world stock exchanges, especially that of Wall Street. Yet, data in hand, there is a statistic that indicates that in the 5 days of the week where trading is open, one day is always weaker than the others. Same thing for the monthly data: there are months of the year where the indices are more positive than others.
The reasons may be different but these are data that help investors a lot to decide when is the right time to invest and when not.
Monday is the worst day of the week
Analyzing the statistics of the last 95 years of the Wall Street Stock Exchange it is evident that Monday is the worst day for those who invest in the stocks present in this market. On the other hand, even October 19, 1987, a black day for the US stock exchange where more than 20% of its capitalization evaporated, was a Monday. Even today this day is the worst for finance, but why? It is not easy to understand but the experts think that the stop on Saturday and Sunday then brings together any leaps and negativity on Monday.
In any case, the data of the last 95 years both in the short and in the long term say it: Monday is the worst day of the week for those who invest. Is the best? data in hand are on Tuesdays and Wednesdays. There is no certainty as to why Wall Street often closes negatively on Mondays, psychologists and anthropologists should work to try to resolve the doubt.
And what is the worst month?
If, on the other hand, we broaden the numbers on a monthly scale, here too we can see that there are historically more favorable months of the year and others that are more scarce. Also in this case we can try to hypothesize the reasons. For example, historically the month of January is the most positive because investors probably get to work to try to flesh out their portfolios by starting the year in the best way. September, on the other hand, tends to be the most negative month also because it is the one immediately after the holidays and many investors need to withdraw some funds from the markets to face the expenses that are looming in the last part of the year.
However, the scenarios can change as the financial markets are very volatile. For this reason, the data must be analyzed both in the long and in the short term. For example, the month of May is considered negative in the long term but if we look at the short-term data of the last 10 years we will see that this is not the case and that indeed May went very well.
Beyond volatility, statistical information is very important for professional investors because it allows them to implement strategies with a strong statistical advantage. These data are very valid in the US markets while less so in Europe.
Original article published on Money.it Italy 2023-05-13 18:48:26. Original title: Quando conviene investire a Wall Street secondo la statistica
