When Is the Best Time to Buy Stocks?

The moment before you press “buy” on your investing app can be fraught with indecision. Will the price drop as soon as you click? Will tomorrow’s earnings report send your line graph into the red?

There is some colloquial wisdom about the best days and times to buy stocks. But timing the market is extremely challenging, even for investment professionals. A much more important factor is that you invest regularly.

However, if you’re interested in the best times to buy stocks based on historical trends, here’s what you need to know.

Table of contents

• When is the best time to buy stocks
• When is the worst time to buy stocks
• When is the best time to sell stocks
• How does the stock market work
• Which factors affect the stock price
• Best time to buy stocks FAQ
• Summary

When is the best time to buy stocks?

Trying to determine the best time to buy stocks entails timing the market — an investment strategy typically not recommended for everyday investors looking to build wealth. Instead, experts usually advise dollar-cost averaging, a strategy that involves investing a set amount of money at regular intervals. But historical trends can give us insight into when stocks have typically done well.

Best time of the day to buy stocks

The first few hours of the trading day tend to see the most trading activity. Traders have had a chance to process the news from the early morning or the evening before, like announcements from federal regulators or companies' earnings reports.

The last hour of the trading day also tends to see a lot of activity as traders look to capitalize on trends — such as a rally that took place earlier that day — which provides an opportunity to snatch up a deal before the market closes. Those trading hours can be an opportunity for investors, since they often see the most movement and, therefore, the most potential for gain.

But again, attempting market timing and investing with a short-term view is risky. Experts at Charles Schwab advise via their education center that traders never use more than 5% of their account for a single trade and lower that to no more than 1% during the volatile opening and closing hours.

Best day of the week to buy stocks

Mondays and Fridays can be slightly more volatile for buying and selling stocks than in the middle of the week. On Mondays, markets can be affected by news from the weekend. On Fridays, traders may dump stocks that haven’t met expectations so they don’t have to hold them over the weekend.

However, when it comes to investing, the difference between days of the week has become negligible and shifts from year to year.

Best time of the month to buy stocks

Stocks tend to be highest at the beginning and end of the month, as mutual fund managers direct money into their funds on their regular monthly cycle.

This means that some investors aim for the last five days of the month’s trading if selling — though again, choosing when to buy stocks and when to sell stocks based on historical trends is likely not as good a move as sticking to your long-term strategy.

Best time of the year to buy stocks

With the turn of the year comes optimism and new cash infusions, making December and January months that have historically seen stocks rise. April also tends to be a strong month for stocks.

If you’re interested in buying the dip or trying to buy at the lowest price, September tends to be a down month. However, investing consistently through the year will likely better help you whether market downturns and bear markets over the long term.

When is the worst time to buy stocks?

September is historically the worst month for stock market gains. Depending on your trading habits, this could be a good time to buy low or a time to lay low and wait until mid-October when trading picks up again.

Many investment professionals advise that you keep investing when stocks are down to realize greater gains later.

When is the best time to sell stocks?

The ideal time to sell stocks is when the price is highest, but figuring out when that’s the case is hard enough for professional day traders, let alone everyday investors.

The S&P 500 has historically seen the lowest average and median returns in May through October compared to any other six-month period, according to a recent analysis from Bank of America.

That’s why there’s an old adage “sell in May and go away” with the idea being that investors sell stocks in May, keep their cash on the sidelines during the summer, and buy again in the fall when performance historically tends to improve.

But again, financial advisors tend to recommend that you continue investing even when stock prices are down and that you don’t base your decisions on seasonal trends.

When it comes to the time of day, the biggest price movements are typically within an hour of the opening bell and an hour of close. If you want to sell at a more stable price, you likely want to do so during the middle of the day. One of the biggest investor mistakes is selling when a price is low for fear of losing money.

How does the stock market work?

The stock market is based on the concept of dividing ownership of a company into small fractions and selling those fractions, known as shares. When the company is profitable, the value of its shares tends to go up. When it is failing, prices tend to go down.

Financial markets provide a place where stocks can be bought and sold during the course of a trading day. Thousands of companies are listed on various U.S. stock market indexes, with the three largest indexes being the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite.

Stock market hours

The standard hours of the stock market are from 9:30 a.m. to 4 p.m. Eastern Standard Time, Monday through Friday on any day that is not a bank holiday. During this time, you can buy stocks in real-time.

Some platforms will allow extended hours of trading. For example, in May of 2023, Robinhood started to allow its users to trade 24 hours a day, five days a week. However, the service only permits limit orders — those in which users must declare a per-share price for their transaction to be triggered.

Which factors affect stock price?

Many factors can affect the price of a particular stock, but some come into play for nearly every stock.

• Demand: If there is no demand for a company’s offerings, its stock price will likely decrease. For example, the large retailer Sears was added to the Dow in the 1920s. But as consumer shopping habits changed, the price of the stock fell, the stock was removed from the Dow and the company eventually declared bankruptcy and was taken off the stock market altogether. On the other hand, technology companies like Apple and Amazon have watched their share prices rise as people transition to a more technology-centered way of life.

• Financials: Companies that sell shares on the public market are required to disclose information about their financials. Those quarterly earnings reports can move the price of stock up or down depending on whether a company’s financials meet, beat or miss expectations.

• Company news: News releases from a company — such as an announcement that it’s developing a new product or bringing on a new CEO — can also cause its stock price to move up or down, depending on whether investors believe the news is good or bad for the company.

• Economy: When the outlook on the economy is positive, stock prices tend to rise based on investors’ confidence in their future earning potential. Conversely, negative outlooks — such as expected higher inflation or an impending recession — can drive prices down.

• Geopolitical events: When governments around the world increase regulations, sanction other countries or raise or lower interest rates, it can affect the stock price of companies that do business in those areas.

Summary of our guide to the best time to buy stocks

• Ideally, investors want to buy stocks when prices are low and sell them when prices are high.

• However, timing the market is extremely challenging, so financial advisors typically recommend focusing on investing regularly as opposed to attempting to determine the best times to buy and sell.

• Historical trends can give us insight into when stock prices tend to rise and fall. For example, the first few hours of the trading day tend to see the most trading activity, and April tends to be a strong month for stocks while September is often weak.