![\"\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/Ben-Kumar.webp.webp\"\/)
Twitter\/X can be a dangerous place. Lots of unchecked facts flying around. So I\u2019m usually pretty sceptical about investment claims. But one of the reputable people I follow is @brett_donnelly. And during April\u2019s market ups and downs, he said the following:<\/p>\n
\u201cIn 2008, even as stocks fell 50%, long SPX on Tuesday was strongly positive for the year. Tuesdays tend to be reversal days in bear markets.\u201d<\/p>\n
To translate that quickly, what Brett is saying is:<\/p>\n
First, I took a look at the data and Brett\u2019s numbers absolutely stack up (told you he was worth following).<\/p>\n
In 2008, the S&P 500 lost 49% from peak-to-trough. The average return for the 52 Tuesdays in 2008 was 0.44%. Every other day of the week had a negative average.<\/p>\n
In fact, if you\u2019d have just invested in the market on Tuesdays (buying at the start of the day, selling at the end), the total return in 2008 would have been 24%. Market down 50%, but the Tuesday Trade up 24%?!<\/p>\n
Here\u2019s the 2008 journey in chart form:<\/p>\n
Source: FactSet\/7IM<\/p>\n
If you spend a lot of time talking about the benefits of long-term investing, these sorts of quirks can be uncomfortable to say the least. Have I been telling our investors the wrong thing? Should I start a Tuesday-only fund?<\/p>\n
Well, maybe not quite yet.<\/p>\n
After a bit more time in the data, there were two things I took away \u2013 one about investment strategy, the other about investor psychology.<\/p>\n
First, Brett\u2019s phrasing is bang on: \u201cTuesdays tend to be reversal days in bear markets.\u201d<\/p>\n
\nTuesdays looked no better than any other day in the 2022 rate hike sell-off. So, it\u2019s not a guarantee<\/p>\n<\/blockquote>\n
That word \u2018tend\u2019 is important. It means more often than not. In 2008, Tuesdays were the bright spots. Same in 2020 with the COVID sell-off. But Tuesdays looked no better than any other day in the 2022 rate hike sell-off. So, it\u2019s not a guarantee (nothing is in investing!).<\/p>\n
And the context of \u2018bear market\u2019 is important too. The world spends more time growing than shrinking \u2013 more time in a bull market than a bear market. While I can\u2019t tell you what day will do best in a bull market, the likelihood is they\u2019ll all do pretty well (in 2023 and 2024, Mondays, Thursdays and Fridays all returned double-digits, while Tuesdays were basically flat).<\/p>\n
Now, it is notoriously difficult to predict bear markets. Only trading Tuesdays in case of a bear market is like any other strategy investing for the end of the world \u2013 an intelligent-sounding way to miss out on the long-term returns you were investing for in the first place.<\/p>\n
No magic answer here. We\u2019ll just have to stick to long-term, thoughtful diversification.<\/p>\n
So, what\u2019s the psychology lesson? Well, the fact that the Tuesday effect happens at all is, to me, a demonstration of the underlying human-ness of markets. Why might it happen?<\/p>\n
\nRational, emotionless investment markets? Nope. Just the combined actions of ordinary people<\/p>\n<\/blockquote>\n
It\u2019s all about psychology (and a little about timezones, also a human invention).<\/p>\n
US investors get nervous about something on a Thursday or Friday, when a lot of economic data comes out. Maybe they sell a little \u2018just in case\u2019. They stew all weekend. The news doesn\u2019t help \u2013 lots of deep-dive investigations into whatever conflict\/crash\/catastrophe is causing the worry.<\/p>\n
Asian investors have seen Friday\u2019s US sell-off, been unable to do anything and been stewing themselves. First thing Monday morning in Tokyo, they sell \u2018just in case\u2019. Europe wakes up to Japan selling off. Further drops. US investors wake up to panicked sales and maybe have one more day of panic themselves. But by the end of Monday, the world hasn\u2019t shattered. And there are lots of cheap stocks! Hence, turnaround Tuesdays\u2026<\/p>\n
Rational, emotionless investment markets? Nope. Just the combined actions of ordinary people, dealing with emotions, stress and fear like everyone else. And if I tell you that recent research suggests that individual investors spend just six minutes doing research before they trade , maybe the above starts to make sense.<\/p>\n
Ben Kumar is head of equity strategy at 7IM<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Twitter\/X can be a dangerous place. Lots of unchecked facts flying around. So I\u2019m usually pretty sceptical about…\n","protected":false},"author":2,"featured_media":116898,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3091],"tags":[51,8081,2441,66,52504,16,15],"class_list":{"0":"post-116897","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-investments","10":"tag-markets","11":"tag-strategy","12":"tag-tuesdays","13":"tag-uk","14":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114539853562830885","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/116897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=116897"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/116897\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/116898"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=116897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=116897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=116897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}