Humans like the comfort of consensus.

Whether it’s Matcha, Beanie Babies or Crocs, we often take our cues from what other people are doing.

If everyone is buying something, it feels safer to buy. If everyone is selling, it feels safer to sell. Even if that thing is pretty dreadful …

Source: Crocs/Marketplace.org

 

Investors are no different – People follow people, money follows money and trends form.

Trends, more often than not, form when markets are looking a little bit scary.

Take 2008

The S&P 500 lost 49% from peak-to-trough. Terrifying.

But.

The average return for the 52 Tuesdays in 2008 was up 0.44%. Every other day of the week had a negative average.

Source: FactSet/7IM

 

In fact, if you’d have just invested in the market on Tuesdays (buying at the start of the day, selling at the end), the total return in 2008 would have been 24%!

The same thing was true in 2020 with Covid, and it’s just as true for the FTSE 100 as for the US market. This is everywhere!

So what’s going on?

The same queues that line up to buy Crocs or Matcha, line up to panic about markets:

Investors get nervous about something on Thursday. They stew on it all weekend – lots of deep-dive news stories into whatever conflict/crash/catastrophe is causing the worry. Japanese markets sell off overnight on Sunday, prompting everyone to think their worst fears are coming true.

European markets sell off. Then the US wakes up, sees a lot of panicked sales, and starts buying overnight on Monday. By Tuesday, everything’s calm.

… until Thursday comes around again.

We’re not proposing moving to a one-day a week investment strategy, nor do we believe that the masses will keep wearing Crocs.

But, what we do know is that trends don’t last forever:

Source: FactSet/7IM.

 

Could 2026 become the year of Tepid Tuesday?

 

*Disclaimer* This article is for general information only and does not constitute advice. The information is aimed at UK retail clients only.

All information is correct at the time of writing and is subject to change in the future. Data Source 7IM