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Should Investors on Equity Markets Be Superstitious? (Example of 7 World Stock Indexes Components)

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  • Krzysztof Borowski

Abstract

The problem of efficiency of financial markets, especially the weekend effect has always fascinated scholars and practitioners due to its relationship with the financial market efficiency. The issue is significant from the point of view of assessing the portfolio management effectiveness and behavioral finance. This paper tests the hypothesis of the unfortunate dates effect upon 7 equity indexes components (CAC40, DAX, DJIA, FTSE30, FTSE MIBTEL, NIKKEI225 and SENSEX), i.e. 419 companies. For all these equities the following rates of return were analyzed- Close-close, Overnight, Open-open, Open-close. As unfortunate days, the sessions falling on the following dates were selected- 13th and 4th day of the month, Friday the 13th and Tuesday the 13th. The research proved the presence of all kinds of the ;unfortunate dates; effects on analyzed markets. The effects were registered for all analyzed rates of return. The most dominating “unfortunate dates effects” resulted to be Tuesday the 13th, proceeding the 4th day of the month effect. This is the first analysis of the presence of the ;unfortunate dates effect, in which other than Close-close returns were examined and fulfils the research gap.

Suggested Citation

  • Krzysztof Borowski, 2019. "Should Investors on Equity Markets Be Superstitious? (Example of 7 World Stock Indexes Components)," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(1), pages 151-174, January.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:1:p:151-174
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    1. Cui, Yueting & Gavriilidis, Konstantinos & Gebka, Bartosz & Kallinterakis, Vasileios, 2024. "Numerological superstitions and market-wide herding: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    market efficiency; calendar anomalies; Friday the 13th; Tuesday the 13th; unfortunate dates effect;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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