Monday Effect

Monday is the starting day of the week, after a refreshing weekend. It is generally the best day to buy a stock of a company in the week, but why? Let’s take a deep dive to know more.

There is a gap of 2 days between Friday and Monday. A lot can happen in 48 hours. Most of the companies negative news are released on Friday evening, assuming the investors will be able to digest the shock and won’t have that much of impact on the stock price. There is another important aspect too. As humans, we are more occupied during the week days, may be with office work. During the weekend, we have less things to do. An empty mind is a dangerous place to live in. As human nature, we have more of negative thoughts. We keep on thinking negative, however the reality hasn’t changed much since Friday. But in our mind’s palace the reality has changed. Unknowingly, it makes us sell the shares. Thereafter, people come to sense and share rises during the remaining four days. Analyse your behavior before you sell again on Monday.

There is no prove theory. It is just a mere observation and the above graph captures it beautifully. Since other folks in the market will be selling on Monday, you can buy them cheaply. That’s why it is considered the best day to buy.

Back to the negative thoughts, what’s your reaction whenever someone appreciates you, our first thought is inferior one, such as: may be this guy wants something from me or may be I didn’t give my 100% so I don’t deserve the appreciation. Looking from a different perspective will surely change the viewpoint completely. However, it won’t change in a day. We have built this habit over such a long time, compounding has helped it grow more. Now if we suddenly want to break the barrier it may backfire but taking baby steps in the right direction will surely help. Realizing is the first step!