Sunny skies today - time to invest?

Investors may want to consider this variable when choosing stocks: the weather.

According to a study by two university professors, morning sunshine leads to optimistic trading. After examining 16 years of daily returns at the leading stock exchange in 26 countries, the researchers found a daily difference of almost one-tenth of a percent between an overcast day and a sunny day -an annual excess return of 24.8 percent.

"Sunshine helps put people in a good mood, and people in good moods make more optimistic choices and judgements," says David Hirshleifer, a finance professor at Ohio State University's Fisher College of Business, who conducted the study with Tyler Shumway, a finance professor at the University of Michigan.

While the study found that rain or snow had little overall effect, the relationship between sun and positive returns was consistent around the world. A solely sun-based trading strategy may be ill-advised. "It's not a way to get rich quick," says Mr. Hirshleifer. "But if you're optimally balancing risk and return, you should indeed take into account the weather in your trading strategy."

The most interesting aspect of the report, Hirshleifer says, is its evidence that emotional, along with purely rational, factors can affect markets.