Hello,
Assuming investing regularly with a buy and hold strategy:
Did anyone find any study concerning statistic patterns? For example always investing on Mondays vs Fridays, or in the beginning of each month vs the end of each month?
I don’t know if there’s any statistically significant difference in the long run…?
In the long run, it makes absolutely no difference at all.
If there’s a signal in simple rules like that, it’s been likely long reduced by quantitative trading companies to noise
This right here says “most likely not.”
I have no source for that, but I’m just gonna go and claim this as a fact: If you have a fixed pattern how you invest, then you’re probably going to do better than someone that does it whenever they ‘feel like it’. So I guess if you hold yourself to a pattern, then at least you’re continuing to invest.
I always invest in the evening (our evening vs. the american one).
It might not change much for VT and co, but the reasoning was that the non professional trader usually set his trades in the evening at home after work and those get executed in the morning.
I don’t know if it makes a change though. It doesn’t matter in the long run.
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”
― Mark Twain
Ok, slightly more serious answer – expanding on what @kilyn has already succinctly summarised – with an excerpt from “The Investor’s Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between”* by William J. Bernstein, highlighting by yours truly for your convenience if you’re not inclined to read the entire paragraph:
While I can’t say I agree with Eugene Fama on the full scope of his Efficient Market Hypothesis which earned him the 2013 Nobel Prize in economics (I better like the Irrational Exuberance stuff by one of his peers he shared the prize with, Robert Shiller, but I digress …), but I do agree with the sentiment of his findings in the scope of “trading rules”.
I personally like @CryingSofa’s advice best: find a fixed pattern** towards your goals, stick to it.
* Excellent book, highly recommended if you’re interested in investing.
** No, not on seemingly historic statistical “evidence”.
Thanks for your contributions.
Based on that it seems like it doesn’t really matter. Fixed pattern for sure, but being set in the morning or in the evening wouldn’t matter much in the long run.
Is simply important to invest when the stock exchange is open. So buy VT starting from 15.30
And why would that be?
if you place the order in a european morning, then the ETF is going to be bought exactly at 9:30 when the NYSE stock exchange opens (15:30 european time, if you put a market order). At that moment there is a spread between the ETF price and the underlying NAV. this spread is at a minimum during the US day, and there are discrepancy between the first 30 min and last 30 min.
So actually set your order after 16:00, so what you buy is aligned on what the ETF actually holds.
see here:
https://www.etfguide.com/7-tips-for-placing-etf-trading-orders/
Big take away
There’s another advantage - many investors start to sell stocks en masse at year’s end, especially those that have declined in value, in order to claim capital losses on their tax returns. So again, the last trading days of the year can offer some bargains.
I think that’s not a good idea.
Imagine there was a difference… (continue this story)
