The following chart plots the average daily returns for the 31 calendar days in a month for the FTSE 100 index over the period 1984-2015. For example, since 1984, the FTSE 100 index has on average increased 0.27% on the 1st day of each month.
- The first day of each month has the highest average daily return for the FTSE 100 index. Followed closely by the second day of the month.
- The worst average daily return has been on the 20th of the month
- As can be seen in the chart, the periods of strongest daily returns occur in the first and final weeks of months.
- The pattern of daily returns in months divides into five (rather surprisingly precise) phases:
- Phase 1 (1st-6th): the index sees positive daily returns
- Phase 2 (7th-12th): the index sees negative daily returns
- Phase 3 (13th-18th): the index sees positive daily returns
- Phase 4 (19th-23rd): the index sees negative daily returns
- Phase 5 (24th-31st): the index sees positive daily returns
The chart below replicates that above, but highlights the positive daily return phases of a month.