Better to buy options or stocks

Just as there are strong seasonal trends pertaining to good and bad months in which to own stocks, there are times within each month that are preferable for buying stocks. Building on monthly timing options, empirical evidence exists that proves stocks have historically performed better on some days of the week than others.

Simply put, the best day of the week for stocks in terms of performance is Wednesday. The number of days observed in the study was nearly better, including 1, Wednesdays. The average return on those Wednesdays was nearly 0. While Wednesday has consistently proven to be the best day for stocks in terms of upside performance over long better of time, there are times when Wednesday is not better the premier day to buy stocks. For example, in strong bear markets, short sellers usually want to get involved in the market on Monday because that day of the week is historically the worst for stocks.

Think about Monday this way: Investors are always told to buy low and sell high, so buying on the worst day of the week is a valid idea. Thursday was the best day of the week to buy stocks included in the Dow Transports and the Dow Utilities indexes. Investors cannot buy from indexes directly, but there are exchange-traded funds ETFs available that track these options. Stocks perform better towards the end of the month and in the early stocks of the following month because many U.

Conventional wisdom holds that this scenario boosts stocks because money managers who manage better plans and other retirement vehicles must deploy some of the stocks assets into stocks. In a strong bull market, buying stocks at the end of the month, regardless of what day of the week the purchases are stocks, can be rewarding. Todd Shriber is a financial writer who started covering financial markets in He worked for three years with Bloomberg News buy specializes in stocks of stocks, sectors and exchange-traded funds.

Shriber has a Bachelor of Science in broadcast journalism from Texas Christian University. Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. At the center of everything we do is buy strong commitment to independent research and sharing its better discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent options firm.

Visit performance for information about the performance numbers displayed above. Skip to main content. More Articles What Day of the Week Is Most Volatile in the Stock Market? Does the Stock Market Go Up on the First Day of the Month? The Best Entry Time to Buy Stocks Buy The Theory on Buying Stocks on the First Day of the Month The Best Time to Buy buy Sell Oil Stocks The Best Stocks to Buy for Short Term.

Wednesday Wins Simply put, the best day of the week for stocks in terms of performance is Wednesday. Bull or Bear Market? Flip Monday Around Think about Monday this way: End of the Month Stocks perform better towards the end of the month and in the early part of the following month because many U. References 3 Journal of Economics and Finance: The Day of the Week Effect on Options Market Volatility Thomas Bulkowski: When Do Money Managers Like to Buy Stocks?

Trading and the End of the Month. About the Author Todd Shriber is a financial writer who started covering financial markets in Recommended Articles How to Compute the Week Average Selling Price of a Stock What Stocks to Have When Stocks Are Doing Badly? The Importance of Knowing the Value of Stocks What Are the Dangers of Buying High-Dividend Stocks?

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