Originally from our sister publication, Advisor.ca.
Unless you live in Saskatchewan, you’re likely a little groggy this morning thanks to the start of Daylight Saving Time over the weekend. No big deal—a little extra coffee and we’re good to go, right?
A research paper published in The American Economic Review in September 2000 suggests that the start of Daylight Saving Time can have a serious effect on the stock markets.
Researchers Mark Kamstra, Lisa Kramer and Maurice Levi found that every weekend creates a “Weekend Effect” on the markets, dragging on returns when traders return to work. This effect was up to 500% stronger after Daylight Saving Time.
“In the United States alone, the daylight saving effect implies a one-day loss of $31 billion on the NYSE, AMEX and NASDAQ exchanges,” they wrote. “We believe that the importance of daylight saving time changes…makes the issue something well worth sleeping on.”
For the full report, click here.
And it’s not just the vernal time shift that affects your clients’ behaviour. Autumn can produce enough client depression that it impacts the markets, and the dark days of winter in northern latitudes may be even worse.