Cold weather means strong returns?

By Staff | June 20, 2014 | Last updated on June 20, 2014
1 min read

Does cold weather freeze stock market returns?

A study done by Ming Dong and Andréanne Tremblay of York University considered this question.

The researchers predicted that warm weather would positively affect returns because of increased optimism. They found that was true, particularly where people can spend time comfortably outside.

Read: 2 ways to lower trading costs

But, surprisingly, cold weather boosts returns as well. Dong and Tremblay hypothesize that this could be because people become more aggressive and take more risks in poor weather.

They say, “The magnitude of the weather effects on stock returns is substantial enough that daily fluctuations of weather conditions are capable of generating high volatility in the stock market.”

Read: What tech stocks to avoid

The authors compared weather patterns to the behaviour of Thomson Reuters’ global equity index.

Read the study here.

Read: Frontier marketing investing myths staff


The staff of have been covering news for financial advisors since 1998.