Wednesday, April 26, 2006

First Day of Month Effect

According to this study, the market performance of the first day of month during the last four years explains over half of the gain S&P500 has had. This is consistent with my own observation and with the performance of my own portfolio. Many times I've had over 5% return in the first trading day of a month, only to see mediocre or even negative performance for the rest of the month.

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