Summer in Maine is delightful. But have you ever considered the affect weather has on the stock market?! Researchers have given this topic quite of bit of study and here are some of their results.

Warmth affects subtleties such as your first impressions of people. In an experiment people whose hands were warmed by holding a cup of hot coffee were more lickly to have positive impressions of others compared to those who had not handled the cup.

That same tendency of positive feelings are found in investors on warm days. Research has demonstrated a strong link between sunny days and higher stock market returns. Another study has shown a link between warm, sunny days and investors' choices of riskier investments.

In contrast, cold, cloudy days on Wall Street correlate in many studies, though not all, to lower stock market returns.

Believing that only logic and financial statements are what drives investment performance would be missing the mark on the research into the nuances that cause changes in the stock market.

Another study on the market and our health found that for some, stock market volatility can be difficult on one's health. In several studies, researchers have found a connection between the percentage change in the stock market and the rate of investor heart attacks. Extreme volatlity. One study noted in the Wall Street Journal article, studied 2006 through 2008 and found that changes up and down in the market of 1% could result in increased cardiac deaths of 2%. The study is backed by others with similar finds.


What do these studies mean to you? I think it means to let go of too tight a belief that you can predict how stocks will behave. Let go of too intense a relationship with your joy and your investments since you can't control the future or the behavior of others as they trade.



And make a good plan, and work your plan the best you can.

Citations:

Sunshine

http://online.wsj.com/article/SB10001424052702304520804576349213528554824.html


Marion R. Syversen, MBA - President
NorumbegaFinancial
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Marion@NorumbegaFinancial.com
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