5 Weird Things to Impact the Global Markets
Traditional financial theory teaches us that economic actors are rational and efficient and that the world of finance is generally dictated by market principles. Although experience clearly demonstrates this isn’t always the case, we nevertheless teach our students that technical and fundamental analyses are the keys to successful trading. But what happens when these approaches fall apart? What sorts of weird things have also been proven to affect the financial markets? Below we touch upon a few examples, reminding investors that the world of financial trading is even weirder than we’re led to believe.
The weather may affect stock prices
Is this actually true? According to data from 26 countries across 15 years, the stock market performs better on sunny days than on cloudy days. As a purely a psychological effect, sunny days put investors in a good mood, which inhibits their risk aversion. Other studies also demonstrate the impact of ten-year sunspot cycles on market activity. While these theories are less conclusive, the top of a sunspot cycle has been shown to coincide with the top of market cycles.
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