Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Weekend Effect

What it is:

The weekend effect is a theory that stock prices rise on Monday and fall on Friday.

How it works (Example):

The idea behind the weekend effect is that companies tend to release bad news on Fridays, when the market has the weekend to digest the news and not react as negatively on Monday.

Why it Matters:

Whether the weekend effect actually exists is controversial and often a matter of academic study. Regardless of its consistent appearance, the weekend effect is a reminder that more things affect stock prices than just earnings. Timing is also a factor.