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Why investors are less risky when the weather sucks

Oct 24, 2024

Why investors are less risky when the weather sucks

Crummy weather doesn’t just make you want to cozy up indoors — it might also make you less willing to take risks with your investments. We’ve all had those dreary days, gazing out the window, maybe even daydreaming we’re in Kelly Clarkson’s Breakaway music video. It turns out that gloomy vibes can push investors to swap a shaky tech stock for a safer bond, whereas sunny days make investors feel bold and take more risks, according to researchers. Why? Because when people feel low, they tend to take fewer risks. This effect is even stronger in colder places like Canada, where shorter days can trigger seasonal affective disorder, a type of depression caused by changes to sunlight exposure. There is evidence for this seasonal link, but experts don’t fully agree on all the details. So, don’t start trying to time your investments based on the weather. Just stay inside all day, like everyone else.

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