Friday, the 13th: Time to invest?

[notiCIas]

Friday, the 13th: Time to invest?

Study reveals that bulls might want to discard their superstitions on a day known for the bizarre.

May 12, 2005: 7:06 PM EDT


NEW YORK (CNN/Money) - If omens and rituals figure as much in your investment decision-making as reading a company's annual report, maybe you should rethink your position on Friday the 13th.

Comparing the Dow Jones Industrial performance on a typical Friday from 1955 to 2005 to those times when the 13th day of the month fell on a Friday, revealed that the index performed better on the day synonymous with bad luck and superstition.

"If anything, it is a good time to be in the market based on past history," said Michael Panzner, the head of sales trading and a vice-president at the brokerage house Rabo Securities, who produced the study.

On average, the Dow ended positive 56.63 percent of the time when it was Friday, the 13th compared to a typical Friday, which ended higher 53.01 percent of the time. The Dow ended in negative territory 43.84 percent of the time on the average Friday and 40.96 when it was Friday, the 13th.

Panzner, who said he came up with the idea more for entertainment than empirical purposes, said that the trend might be due to the fact that market performs better on Fridays to begin with. The possibility of a major weekend news event that would lift markets on Monday makes it a big day in general for short-sellers. The theory is that those traders might buy stock before Friday's closing bell so that they do not pay more for that same share on Monday and take a loss.

"Whether it's related to short sales or investor accumulating new positions, it seems to be a fear/hope that news will come out over the weekend that will help the stock," he said. "For some reason that two-day period seems to stir up these sentiments."

While investors should approach the study with a grain of salt, Panzner will be able to test his computations this Friday, although he could not say for sure if his theory would be advanced.

"If market is hammered down the next three days, it's a good bet we'll be up on Friday, but nothing's a sure bet these days," he said.