Sunshine and Stock Returns

 

Professor Hirshleifer at Ohio State University found that morning sunshine correlates with stock returns. He examined 26 stock market indices around the globe for the period of 1982 to 1997. He looked at sunshine versus some cloud cover in the city of a nation’s largest stock exchange. “In New York City, the annualized nominal market return on perfectly sunny days is approximately 24.8 percent per year versus 8.7 percent per year on perfectly cloudy days.” He cites evidence that sunshine improves investors’ moods. When their moods are elevated, investors are less risk averse and are more likely to buy.

(Source, Book Inside Investor's brain, Chapter 1 by Richard L. Peterson)