Monday mornings is when investors sell losses

27 Feb 2019 - 09:45
Dr Gizelle Willows

                Dr GD Willows

                                  Dr Gizelle Willows

Stock market investors are more likely to sell losses on Monday mornings, according to research published on the 23rd February 2019.

Overall, investors are reluctant to sell losses because of the anguish felt when a paper loss is crystallised into a real loss.  However, this did not occur first thing on Monday morning when the market opened.

The research is important because it suggests that investor susceptibility to bias is reduced when people have time to think through investment decisions.  For investors, they are using the weekend and then Monday morning to put right the bad investment decision. 

RMIT researcher Dr Daniel Richards, a Lecturer in Wealth Management in the School of Accounting, and Dr Gizelle Willows, an Associate Professor at the University of Cape Town investigated the days of the week and the time of day that investor’s trade.

Dr Richards said: “When we looked at 7 200 UK retail investors, we found a strong tendency to sell losses on a Monday morning, but selling of gains occurred throughout the week”.

Research has shown us that market returns are higher on Fridays than on Mondays .  This indicates that investors are consciously or unconsciously influenced by mood which effects when they trade.

When asked why this might occur Dr Richards suggested two reasons: First, selling a loss and Monday mornings both create bad moods, so investors choose to combine these two activities.  Secondly, selling a loss is a harder decision than selling a gain so investors may use the weekend to digest this trading decision. 

The researchers also found that investors traded more frequently on Mondays than on any other day of the week. 

Dr Willows said: “If you look at Mondays, individual investors are buying and selling more actively compared to other days in the week. This is different from institutional investors who trade less on Mondays.” 

This means that individual investors are trading in different patterns than institutional investors and is an interesting avenue for future research.  E.g. Do individual investors react in the same way as intuitional when bad news is released about a company?

The researchers also investigated intraday trading patterns, finding that trading activity followed a W shape.  There is high trading at the start, middle and end of the day, coinciding with arrival, breaks and leaving work.

The research has been published in the Journal of Behavioural and Experimental Finance and can be accessed at or free for 50 days at this link:

For enquiries: Dr Gizelle Willows, or (+27) 21 650 2292 or

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Story By : Associate Professor Gizelle Willows