The stock market is open Monday through Friday 9:30 AM to 4:00 PM East Coast time. If you place an order during any of those hours, your buy or sell will typically be fulfilled within seconds.
The stock market is closed all other hours, including weekends and many holidays. Putting in a trade order when the market is closed means your order will sit and wait until the market’s open the next trading day.
That being said, what is the best time and day to buy stocks?
Best Day To Buy Stocks?
I’ve never seen any data on this but my personal experience has shown me that buying stocks on Friday is the most risky. When you buy a stock on Friday, you know for sure that the following two days the market will be closed. Those are two days where you can’t sell the stock and you are stuck with the price you paid on Friday no matter what happens over the weekend. If something significant takes place, your stock may open for a higher or lower price Monday morning and you might wish you waited to buy.
As I write this, there is a lot of potential big news items that could adversely affect the stock market at any time.
1) The debt ceiling debate and possible government shut down is back again, only this time there is an added wrinkle of it being paired with defunding ObamaCare.
2) Developments in Syria’s civil war can happen at any time.
3) The stock market is very nervous about the amount of money the Federal Reserve keeps pumping into the economy. Weekend developments can greatly influence the market come every Monday morning.
4) The stock market is very close to its all time high which means investors are nervous and more likely to decide to take profits and sell.
5) Terrorist attacks can always happen at any time and they can hit the market hard depending on how big they are and where they are.
While these are some of the headlines and happenings in the news right now, no matter when you read this there will be some sort of list of similar concerns that can adversely affect the market. There always is. It means when you buy stock on a Friday, you accept the risk that something could happen over the weekend which might drive your stock lower or higher the next time the market opens on Monday.
I Prefer To Buy Early In The Week
Whenever I buy a stock, I feel most comfortable buying it early in the week. If I buy something on Monday I will have had two days of information (the just completed weekend) that I wouldn’t have had if I were to have bought the stock on Friday. The only surprises that can happen are yet to come.
I like buying stocks on Monday, Tuesday, and Wednesday with Thursday and Friday the least desirable days. There is nothing scientific about this and no data that I am aware of. It is just my desire to buy stocks with as much of the workweek ahead of me rather than behind.
Best Time Of Day To Buy Stocks?
Typically the beginning of the trading day and the end of the trading day are the most volatile. The middle hours of the day are the most calm. This makes sense if you think about it: at the market’s open, orders have piled up from when the market last closed and investors are also making moves on overnight news. Things calm down after all those new trades have been made and then pick up again at the end when people want to make last minute moves either in or out of stocks.
But the best time to buy stocks? Is there really a best time? If there is, I have zero interest in finding it because I am a long term investor. The stocks I buy are meant to be held for at least a year (hopefully longer) and any small gyration of the stock price based on the time of day when I buy is totally irrelevant to me. If I need to find the absolute best time to buy a stock, I probably shouldn’t be investing in stocks in the first place.