Are you hoping to capitalize on your investments by finding great stocks at the best prices? Skilled investors know the best time to buy stocks during the day. This is because the market usually follows a particular daily pattern.
Best Time to Buy Stocks During the Day
To identify the best time of day to buy stocks, we’ll go through each portion of the day and describe the advantages and disadvantages of purchasing during each time period. That way, you’ll get a feel for the flow of the market, and you’ll know how to make wiser investments (learn how to reinvest your tax return).
In the Morning
The New York Stock Exchange (NYSE) rings the opening bell each day at 9:30 a.m. ET, heralding the beginning of a day of trading. Other stock market platforms, such as the Nasdaq exchange, have no physical bell, but still refer to the start of the day as the “opening bell.”
When the stock market first opens, the stocks experience a lot of volatility. As such, the stock price may fluctuate during the first sections of the morning. These fluctuations come about because the market needs to catch up on all the news that has happened since the last closing bell.
Anything that impacts the economy will get factored into the market, and prices will reflect these changes.
Because of this, novice investors should resist the urge to start making trades first thing in the morning. Instead, it’s best to wait until stock volatility evens out. Check out these investing basics if you want to become more experienced!
It is the best time to buy stocks during the day for highly experienced investors, though. In fact, this is often when the largest trades of the day happen. So, whether or not this time period is profitable for you might come down to experience.
Investing usually dies down a bit by 11:30 a.m. ET.
If you’re just getting started with your investing journey, you might want to check out Robinhood. This platform gives you access to stocks, ETFs, and other financial items, all for no convenience fee. They even will pay for your first stock!
Middle of the Day
For the next few hours, trading slows considerably. During this time, many investors wait to see if any additional finance-related news becomes announced. The stock market is a fast-changing place, and the news can determine how the stock market behaves until it closes.
For newcomers to the stock market, this might comprise the best time to buy stocks during the day. For these few hours, the volatility of most stocks levels off. In addition, the trading action gets slower, and traders often get the most predictable returns.
So, if you want to make the most out of your trading sessions as a beginner, get used to buying during this time. Once you’re comfortable, you can start buying stocks during times in which stocks are more volatile.
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Once you open one of these accounts, Betterment’s technology helps you manage your money and gives you suggestions. That way, you can get the most out of every dollar!
The Closing Bell
The NYSE rings the closing bell at 4:00 p.m. ET. This announces the close of trading for the day.
During the final hours, stock volatility increases again. As the clock winds down, people often make big trades, and stocks may even see some reversals. From 3:00 p.m. ET onward, some of the traders will try to finalize their positions. Others might try to stir up rallied momentum that carries over into the next day.
So again, this can be the best time to buy stocks during the day for experienced investors. Others should look at other options for the best time of day to buy stocks.
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More Finance Tips
The best time to buy stocks during the day depends on your level of experience. The more experience you have, the better deals you might secure during high times of volatility.
Want to know how to grow your finances? Take a look at this article!
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