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Which Day of the Week Has the Best Stock Market Performance?

By JLP | August 29, 2015

I heard the following in Richard Thaler’s book Misbehaving: The Making of Behavioral Economics* the other day:

“Stocks tend to go up on Fridays and down on Mondays.”

Of course I can’t just read or hear—I was listening to the Audible version of the book—something like that and not investigate it.

In my spreadsheets, I found a copy of the daily closing prices for the Dow Jones Industrial Average going back to 1928. I updated it through Monday’s (August 24, 2015) closing price and ran the numbers. Below is what I found:


DOW JONES INDUSTRIAL AVERAGE

PERFORMANCE BY DAY OF THE WEEK
 
Down Days
Even/Up Days
Total Days
Pct. Down
Pct. Even/Up
Monday 2140 2072 4212 50.8% 49.2%
Tuesday 2116 2309 4425 47.8% 52.2%
Wednesday 2042 2406 4448 45.9% 54.1%
Thursday 2080 2298 4378 47.5% 52.5%
Friday 1986 2374 4360 45.6% 54.4%
TOTALS 10364 11459 21823 47.5% 52.5%

That information wasn’t enough for me. I also wanted to see the average performance for down days, up days, and for all days based on the day of the week. Here are those results:


DOW JONES INDUSTRIAL AVERAGE

 
Avg. Down Day
Avg. Even/Up Day
Avg. Day
Monday -0.88% 0.78% -0.06%
Tuesday -0.72% 0.74% 0.05%
Wednesday -0.73% 0.74% 0.07%
Thursday -0.71% 0.70% 0.03%
Friday -0.73% 0.69% 0.04%

So, while what Thaler says is true, Wednesday is the best day of the week performance-wise (these are price returns).

*Affiliate link

Topics: Investing | No Comments »

A Brief Look at China’s Indexes

By JLP | August 26, 2015

For kicks, I decided to take a look at China’s MSCI Indexes. I haven’t seen anything like this in years. Wow.

MSCI Index MTD 3MTD YTD
ALL CHINA + HONG KONG + TAIWAN -17.52% -31.23% -11.70%
GOLDEN DRAGON -13.81% -24.04% -11.63%
GOLDEN DRAGON (A exB) -17.55% -31.44% -11.18%
GOLDEN DRAGON (A) -17.56% -31.46% -11.20%
GOLDEN DRAGON + OVERSEAS CHINA -14.03% -24.17% -12.54%
HONG KONG+ -12.61% -21.23% -8.48%
ZHONG HUA -13.82% -24.55% -9.87%
ZHONG HUA (A) -18.13% -32.70% -10.20%
ZHONG HUA (A) + HSBC -17.73% -31.91% -10.45%
ZHONG HUA (A) ex HONG KONG -18.83% -34.73% -10.82%
ZHONG HUA + HSBC -13.43% -23.59% -10.30%
ZHONG HUA + OVERSEAS CHINA -14.11% -24.67% -11.27%
ZHONG HUA ex B -13.79% -24.48% -9.79%
ZHONG HUA ex B + HSBC -13.40% -23.53% -10.23%
ZHONG HUA ex B + OVERSEAS CHINA -14.08% -24.61% -11.20%

Now might be a good time for the adventurous to consider investing in China. Better have a penchant for volatility.

Topics: Investing | No Comments »

The 25 Worst One-Day Losses for the Dow Jones Industrial Average

By JLP | August 25, 2015

Yesterday’s market craziness had lots of people on edge. One article I read (from Fortune, mind you) focused on yesterday’s point loss and compared it to other point losses. I’ll admit, when the market opened down over 1,000 points, I thought, “Wow!” Had that number stuck, it would have been by far the largest decline for the Dow Jones Industrial Average.

As you can see from the following table, yesterday’s loss of 588.40 was the eighth largest decline in the history of the Dow Jones.

RANK POINT LOSS DATE
1 -777.68 Monday, September 29, 2008
2 -733.08 Wednesday, October 15, 2008
3 -684.81 Monday, September 17, 2001
4 -679.95 Monday, December 1, 2008
5 -678.91 Thursday, October 9, 2008
6 -634.76 Monday, August 8, 2011
7 -617.78 Friday, April 14, 2000
8 -588.40 Monday, August 24, 2015
9 -554.26 Monday, October 27, 1997
10 -530.94 Friday, August 21, 2015
11 -526.00 Wednesday, October 22, 2008
12 -519.83 Wednesday, August 10, 2011
13 -512.76 Thursday, August 4, 2011
14 -512.61 Monday, August 31, 1998
15 -508.39 Tuesday, October 7, 2008
16 -507.99 Monday, October 19, 1987
17 -504.48 Monday, September 15, 2008
18 -486.01 Wednesday, November 5, 2008
19 -449.36 Wednesday, September 17, 2008
20 -444.99 Thursday, November 20, 2008
21 -443.48 Thursday, November 6, 2008
22 -436.37 Monday, March 12, 2001
23 -427.47 Wednesday, November 19, 2008
24 -419.63 Thursday, August 18, 2011
25 -416.02 Tuesday, February 27, 2007

Point losses get lots of attention from the press, but they really don’t mean anything. It’s the percentage losses that we should focus on. When we do that, yesterday’s loss doesn’t even come close to registering in the top 25 worst days as you can seem from the following table:

RANK PCT. LOSS DATE
1 -22.6% Monday, October 19, 1987
2 -13.5% Monday, October 28, 1929
3 -11.7% Tuesday, October 29, 1929
4 -10.7% Monday, October 5, 1931
5 -9.9% Wednesday, November 6, 1929
6 -8.4% Friday, August 12, 1932
7 -8.1% Monday, January 4, 1932
8 -8.0% Monday, October 26, 1987
9 -7.9% Wednesday, October 15, 2008
10 -7.9% Monday, June 16, 1930
11 -7.8% Friday, July 21, 1933
12 -7.7% Monday, December 1, 2008
13 -7.3% Thursday, October 9, 2008
14 -7.2% Monday, October 18, 1937
15 -7.2% Monday, October 27, 1997
16 -7.2% Wednesday, October 5, 1932
17 -7.1% Monday, September 17, 2001
18 -7.1% Thursday, September 24, 1931
19 -7.1% Thursday, July 20, 1933
20 -7.0% Monday, September 29, 2008
21 -6.9% Friday, October 13, 1989
22 -6.9% Friday, January 8, 1988
23 -6.8% Monday, February 27, 1933
24 -6.8% Monday, November 11, 1929
25 -6.8% Tuesday, May 14, 1940

Want to know where yesterday’s percentage loss ranked?

50? NOPE.
100? NOPE.
150? NOPE.

192. That’s right. Yesterday’s 3.57% loss was the 192nd worst one-day loss in the history of the Dow Jones Industrial Average. But, don’t expect that to get any media attention.

Topics: Investing | 1 Comment »

Sale, Sale, Sale (the Way We SHOULD Look at Market Declines)

By JLP | August 24, 2015

I try to look at things differently.

Let’s face it, market declines like we have seen in the last week are no fun—especially for those of us who have built up sizable retirement accounts over the years. That said, stock market declines are not all bad. One way to think about them is imagine you are in a store that is having a BIG SALE and your goal is to stock up.

I did some research and looked at the price changes for the stocks in the S&P 500 Index (my S&P 500 Index component source returned 502 stocks) from Friday’s close (08/21/2015) to today’s close (08/24/2015). I assumed that a person had $100,000 to invest. I ignored brokerage fees and assumed whole-share purchases. Then, I estimated the expected annual dividend payment using those numbers and compared those numbers with the numbers I got with Friday’s closing prices. The difference was pretty amazing.

For example…

On Friday, you could purchase 1,320 shares of Chevron at Friday’s close and 1,387 at today’s closing price. Assuming the dividends stay the same, Chevron would pay you an annual dividend of $5,649 based on Friday’s purchase price or $5,935 at today’s price. That’s a 5.05% increase.

Granted, these numbers come with risk. For one, the stock price could decline more. Also, the dividend could be reduced or even eliminated. So, there is risk.

That said, if you are still interested, here is a link to a PDF copy of my findings:

A Different Way to Look at the S&P Decline

The stocks are in alphabetical order.

Topics: Investing | No Comments »

Wow…

By JLP | August 24, 2015

Take a look at the following image that I snagged off the WSJ Markets page:

DJIA 1-Hour Into Day 08-24-2015

As you can see, the DJIA has made up about half of its opening loss. Sounds good until you realize it’s still down 432 points.

It’s going to be a long day.

Topics: Investing | 3 Comments »

Rough Waters Ahead

By JLP | August 24, 2015

Brace yourselves…

1. It looks like today could be a rough day for the stock market.

E-Mini SandP 500 Futures (ESU5) 08-24-2015

2. All sorts of “experts” are going to be telling you that their expensive insurance products could have protected you from all of this.

3. Peter Schiff is happy.

Topics: Investing | No Comments »

Sunday Distraction: Joey Alexander

By JLP | August 23, 2015

This is impressive.

Joey Alexander is a 12-year old jazz pianist. Check out this video:

BTW, Larry Grenadier, who is interviewed in the video, is the bassist for the Brad Mehldau Trio.

Topics: Miscellaneous, Music | No Comments »

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