Is it better to buy stocks at the beginning or end of the month? Does it matter?

Question

I have a sharebuilder plan set for the 4th Tuesday, but I'm not sure if that is the best time of month to purchase.

Answer 1

Look more closely at the papers mentioned by William W. Those papers say that there is a higher than average return during the last three days of the month.

William's conclusion is that this is the best time to buy. He is wrong. You want to buy before the market goes up, not after it does. Therefore, it would seem that the best time to buy is just before the end of the month.

But the truth is that if the money is available earlier in the month, it is better to buy then -- as long as the expected return during that part of the month is positive. Would you rather have the money earning something in the market or earning nothing sitting in your checking account?

In the long run, this decision will make very little difference to the value of your portfolio.

You should invest when the money becomes available.

Answer 2

I dont see any reason why either would be more advantageous. There are some situations where you would want to buy at the end of the month(for instance - December - when all the fund managers dump their losers for tax purposes only to pick up new stocks in the start of the next year.) There are some who think that buy buying before fridays is a good idea too because when 401k money is invested it usually is when employees get paid on friday and the investment is done that day. I think in the long run it probably isnt going to get you that much in gains to make it a profitable strategy

Answer 3

RE:
Is it better to buy stocks at the beginning or end of the month? Does it matter?
I have a sharebuilder plan set for the 4th Tuesday, but I'm not sure if that is the best time of month to purchase.

Answer 4

It has been shown in a recent study that the end of the month is the best time to buy stocks. There is not a credible reason why this should be the case, but historical data in multiple countries shows that "the end of the month" effect does indeed exist:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=917884

Answer 5

depends how superstitious you are -

timing is usually a factor only when major news is set to come out - like earnings, it's a good idea not to buy a stock right before it's quarterly earnings are coming out especially if the market is very bullish on it

Answer 6

I have never heard that before. Its usually buy on the rumor and sell on the news though. Find out the schedules of the companies you invest in as it would be more helpful.--- earning reports,etc...