April 1, 1999
BEWARE STOCKS AND DAYLIGHT SAVING
This weekend, when Canadians are putting their clocks forward one
hour they probably won't be thinking about their stocks..but perhaps they
A trio of researchers has found strong evidence for unusual
declines in stock market returns on the Monday after daylight savings time
begins and on the Monday when it reverts back to standard time.
associate professor in economics Mark Kamstra, SFU business administration
adjunct professor Lisa Kramer and UBC professor Maurice Levi recently
completed a study examining stock market returns on those days.
says daylight savings Mondays show returns that are four times more
negative than every other Monday during the year.
He and his colleagues
began the study after learning of UBC professor Stanley Coren's research
into sleep deprivation, which shows that physical capital losses amount to
$60 billion in the U.S. on each of the two Mondays after the clocks are
"We wondered whether, if there were some kind of systematic
sleep desynchronosis, we might feel this effect in financial markets,"
says Kamstra. Sure enough, he says, stock market returns on those two
Mondays also showed losses of close to $60 billion in the U.S. on the
Kamstra postulates that people whose sleep routines have been
disrupted are perhaps more nervous than usual and therefore more averse to
making decisions that involve risk. The result? "If you feel a little less
confident in yourself, you may be willing to pay a little less for
something that's a risk."
CONTACT: Mark Kamstra, 291-4514,