Is the Investor’s Biorhythm Affecting the Stock Market?

Ruxandra Trifan ()
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Ruxandra Trifan: The Bucharest University of Economic Studies

A chapter in Digitalization in Finance and Accounting, 2021, pp 71-82 from Springer

Abstract: Abstract This article studies the relationship between biorhythm variables and stock returns from November 2009 until December 2018, with application on the Romanian capital market. Taking into consideration the seasonal affective disorder (SAD), the fall effect, daylight savings time changes and moon phases, we check for any impact on the decision-making process, keeping in mind that investors are driven by feelings and emotions, especially in uncertain and risky circumstances. Our findings indicate minor but significant impact on the stock returns from the SAD effect, the fall effect, and the lunar cycle. Investors become more pessimists and uncertain when facing light deficiency during fall and winter and in proximity to full moon periods, which ultimately leads to a drop in their trading activity, respectively, stock returns. Our results are consistent with previous research.

Keywords: Biorhythm; Stock returns; Mood; Anomalies (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-55277-0_7

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DOI: 10.1007/978-3-030-55277-0_7

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