When Is the Best Time of Day to Buy Stocks?

Here’s a quick quiz for all investors: What’s the best time of day to buy stocks?

Ha! It’s a trick question, the best time isn’t during the day. Believe it or not, the stock market, in aggregate, has done horribly during the trading day over the past 18 years.

This is one of the most stunning statistics about investing: the market’s entire gain—and then some—has come when the exchange is closed (the difference from the closing bell and the next day’s opening bell).

Obviously the transaction costs of buying and selling each day would eat your shorts, but the moral of the story is clear.

The great MarketSci blog has the deets and this chart:

Posted by on October 7th, 2010 at 4:43 pm


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