If it’s Tuesday, you should be trading

New York — Here’s a new trading strategy, a rigorous quantitative model: make sure you own stocks on Tuesdays.

History shows that not holding the S&P 500 on the day of the week that turns out to be the best one reduces your annual return to 6.5% from 9.1%, according to data compiled by Evercore ISI that goes back to 1980.

Also, it keeps coming true. While stocks are poised for the worst month since February, Tuesdays have delivered an average 0.7% gain, with yesterday boasting a 2.2% jump, the second-best rally of 2018.

“We are not arguing that Tuesdays hold some special position in the markets — though we would be interested in reasons for this phenomenon; just pointing out a quirk,” Dennis DeBusschere, Evercore ISI’s head of portfolio strategy, wrote in a note to clients.

Besides being quirky, the existence of “turnaround Tuesday” does highlight a hazard of market timing, how missing big days or failing to observe some utterly random variable, has the potential to torpedo your return. In 2018, Tuesday has accounted for three of the S&P 500’s five best-performing days.

Bloomberg