Why do stocks go down on Friday?
Lets take a look. Compare stocks and shares ISAs If youre planning to open a stocks and shares ISA, choosing the right platform is important. To help you narrow down the choices, weve created a list of some of the top stocks and shares ISAs. Though not an exact science, it may seem that share indexes such as the FTSE100 or FTSE250 slump on a Friday, more so than on any other day of the week. There are likely three main reasons behind this. 1. The stock market closes at the weekend  Firstly, Friday is the last day of the working week and the last day the stock market can prepare for adverse news over Saturday and Sunday. Such guesswork can have an impact on volatility, meaning stocks may be more likely to succumb to large swings. Large movements are more likely to be noticed than smaller ones, which is perhaps why Friday has a reputation for being unkind to stock values. 2. Expiring stock options in the US fall on a Friday  Another reason behind the Friday fall may be that in the US, the last day of trading expiring stock options normally falls on the third Friday of the month. This is where stock options, index futures and index options all expire. Such deadlines can help create volatility, increasing the chances of large dips. While expiring stock options do not apply to the UK market, the US market can impact sentiment in the UK. 3. Professional investors do not welcome uncertainty  Its worth noting the role of professional investors too. Thats because full-time traders are unlikely to favour extremely volatile markets so they may be more inclined to close a position on a Friday. Such collective behaviours may increase the chances of the market slumping on a Friday. These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold. To help you side-step these pitfalls, and move forward on your path to wealth-building, weve created a free report, The 3 Worst Mistakes New Investors Make. Just enter you best email below for instant access to your free copy. Click here! If youre an active rather than passive investor, you may find that Friday is a good day to sell your stock. This is backed up by research that suggests market crashes typically occur on a Monday. So sell your stock on the Friday, and you could grab a bargain on the Monday once prices have dipped. Yet, its important to note that big market swings can happen on any day of the week. If you are looking to day trade, relying solely on the day of the week is probably not the best strategy. Remember, if youre short-term day trading, the odds are typically stacked against you. Human emotion, asymmetric market information and technological limitations can all turn into your worst enemy. Always think long and hard before considering whether to day trade and ensure youre aware of the common pitfalls. You dont have to be a day trader to benefit from stock market returns. The use of passive index funds has exploded in recent years. Passive investing allows investors to benefit from stock market gains without needing to research active funds or obtain the services of an independent financial advisor. Yet, active investing is also a credible option and doesnt necessarily mean day trading, where theres a high chance of losing your money. Taking the time to research and pick your stocks can be a rewarding experience, as long as you know your chances of success. See our articles on active vs passive investing and the top British stocks for July. If youre new to investing, take the time to familiarise yourself with our investing tips for beginners. Get a free initial review lasting up to 1 hour, plus 50 off any follow-up advice. MyWalletHero has sourced you a 50 discount off the cost of advice when you find an independent or whole-of-market financial adviser through Unbiased.co.uk*. All advisers are FCA-regulated, qualified and give fully unbiased advice. To find yourself an adviser fast and for free  use the Unbiased matching tool. Find an adviser now! *This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here. About the author Karl Talbot