Statistical Goodness: Best Day of the Week To Invest

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Statistical Goodness: Best Day of the Week To Invest

May 6, 2008 – 6:36 am

I like statistics, and I like digging through raw data. Bet you can imagine how fun I am at a party!

I don’t believe in market timing, but I do have a lot of general questions about investing and decisions, and I frequently look at some basic analytics when trying to find answers. In this regard I’m going to post some of my questions from time to time in a new topic I call “Statistical Goodness”.

The question I am thinking about today is: What is the best day of the week to invest?

Let’s assume you have a lump sum to invest. You’re not trying to time the market, and you know that if you invest in a properly diversified portfolio based on your own asset allocation you’re portfolio will deliver solid results over time.

Even knowing that, however, wouldn’t you like to know if one day of the week is a better choice than another? It seems like every time I make a sizable investment at one time the next day the market crashes (or at least that’s how it feels).

To answer this question I looked at the daily returns of Vanguard’s Index 500 fund. I also looked at three different time periods, “1990-2008″ (june 1990 through march 2008), 1-year, and 2008 data. Here are the results:

Invest Day	1990-2008	1-year	2008
Fri	0.078%	0.025%	0.347%
Mon	0.043%	0.050%	0.100%
Tue	0.071%	0.155%	-0.085%
Wed	0.012%	-0.186%	-0.188%
Thu	0.004%	-0.113%	-0.892%

The invest day column is the day you would need to invest. The returns listed to the right are for the next day (i.e. if you purchase a mutual fund on a friday, the returns you need to look at are for the following monday).

Friday is the winner for the All Data and 2008 timeframes, and Thursday is the worst choice based in this simple analysis for all three timeframes. Clearly this analysis is simplistic and is only interesting mental (and mathematical) exercise.

Disclaimer: this post includes my own opinions and ideas, and does not constitute legal, financial, or other professional advice. Please review the terms and conditions page for more information.

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