The Sunshine continues but when it comes to investing, does it shine brighter on a Tuesday?

In 2008, the S&P 500 lost 49% from peak to trough, which makes the recent market volatility look like a walk in the park. At the time of writing the S&P is only down 5.24% YTD.

But.

The average return for the 52 Tuesdays in 2008 was 0.44%. Every other day of the week had a negative average.

	Average Daily Return, 2008	Full Year Return
Monday	-0.31%	-17.0%
Tuesday	0.44%	23.5%
Wednesday	-0.62%	-29.6%
Thursday	-0.20%	-11.4%
Friday	-0.01%	-3.8%

In fact, if you had invested in the market only on Tuesdays—buying at the start of the day and selling at the end—the total return in 2008 would have been up 24% and not down 49%.

The same pattern was observed in 2020 during the Covid pandemic, and it holds true for the FTSE 100 as well as the US market. This trend is evident across various markets!

So, what’s happening here?

Ultimately, this illustrates the psychological nature of markets. It’s all about human emotions (with a bit of influence from time zones).

Investors tend to get anxious about certain issues on Thursdays. They ponder these concerns over the weekend, leading to numerous in-depth news stories about the conflicts, crashes, or catastrophes that are causing anxiety. Japanese markets often sell off overnight on Sunday, which causes everyone to fear that their worst fears are coming true. This prompts sell-offs in European markets as well.

When the US wakes up on Monday and sees a lot of panicked selling, they begin buying. By Tuesday, market conditions have typically calmed down again… until Thursday arrives once more.

I would not propose moving to a one-day-a-week investment strategy… but it is a reminder that even panic has a pattern.