Don’t Buy Stocks on This Day of the Week

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Traders are always looking for an edge when it comes to timing the market. While long-term investors generally succeed by putting in money on a regular basis, regardless of the day of the week, some traders avoid buying stocks on certain days to try to give themselves an advantage. Historically, data does show that the market has returned more on certain days than others. However, for most traders — and especially for long-term investors — the variance between days is negligible. Nevertheless, it pays to examine just how stocks have historically performed on certain days to see if it can help you build a successful trading strategy.

What Does the Data Say?

Quantified Strategies, a trading newsletter/blog, backtested the performance of the oldest exchange-traded fund still trading, the SPDR® S&P 500® ETF Trust (SPY), for 30 years, from 1993 to 2023. The SPY ETF tracks the performance of the S&P 500 index and is thus a good proxy for market movements overall. According to the data compiled by Quantified Strategies, here is the average daily performance from the close of one trading day to the next by day of the week:

• Mondays: 0.04%
• Tuesdays: 0.08%
• Wednesdays: 0.05%
• Thursdays: 0.02%
• Fridays: 0.02%

This would seem to suggest that the two worst days on which to buy stocks are Thursday and Friday.

Caveat: Variations by Year

While the Quantified Strategies data is interesting, it’s indicative of a multidecade trend. This isn’t necessarily the type of information that helps traders on a day-to-day basis, as they have much shorter time horizons. With the broad trends suggested by the 30-year data, actual market performance can vary wildly on a year-to-year basis.

For example, if you just looked at the data from how the market performed in 2018, you might want to rethink your whole trading strategy. In that year, Fridays were by far the best day of the week to buy stocks, and by a huge margin. In 2018, the average Friday returned a whopping 0.14%, nearly triple the return of the next-best day — which was Tuesday’s 0.05% average return. If you subscribed to the belief that Thursday was one of the best days to buy stocks in 2018, you would have actually lost money. In fact, Thursday was the worst day to buy in 2018, with an average loss of 0.10%.

What’s Really Behind the Data

One of the truths about statistics is that you can generally find data to back up your position, no matter what it is. If you believe that certain days of the week are better for trading than others, it’s easy to find reasons why that is true. 

For example, some traders say the worst day to buy stocks is Friday since traders don’t want to hold stock over the weekend in case some bad news breaks and they can’t get out of their positions. Others say they will not buy on Monday, as traders tend to dump shares because of bad news over the weekend. Some will cite long-term trends as reasons to buy shares on certain days, while others believe in data from a shorter time period to be more accurate. Even if some traders can cite data to back up their contention that certain days are better for trading, there are plenty of other variables that affect stock market prices that tend to outweigh the day-of-the-week effect. 

Another factor to consider is that the data from Qualified Strategies only refers to movements in the S&P 500-tracking ETF SPY. If you’re planning on trading individual stocks, there’s practically no way to determine which day of the week might be best for your trading strategy. As the factors affecting each individual stock are overwhelming — including industry trends, market sentiment, macroeconomic factors, earnings reports, analyst ratings and many, many others — trying to buy a specific stock based on a day-of-the-week philosophy is likely hopeless.

The Bottom Line

Although long-term data from Qualified Strategies suggests that Thursday and Friday are the best days of the week to buy the S&P 500, you’ll have to take that information with a grain of salt. Short-term trends often overwhelm long-term ones, and trading patterns evolve. In fact, if it becomes apparent that one trading strategy is working better than others — including buying on a particular day of the week — traders tend to exploit that advantage until it no longer exists. In other words, if you’re reading somewhere that trading on one day of the week gives you an edge, by the time you read it, that advantage has likely disappeared.

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