Does Weather Influence Investment Decision?

23 February 2024

Did you know that the weather outside could influence your decisions on investing money? It sounds almost like a joke, but recent research has shown it's true. When the sky is cloudy and grey, people are less likely to invest in projects on crowdfunding platforms compared to when the weather is sunny.

This intriguing finding is outlined in the study "Too Gloomy to Invest: Weather-induced Mood and Crowdfunding" by Copenhagen Business school researchers Kourosh Shafi and Ali Mohammadi. The researchers delved into investment behavior on European crowdfunding platforms and discovered a significant pattern: bad weather leads to a noticeable decrease in investment amounts. This suggests that our mood, influenced by the weather, plays a crucial role in financial decision-making.

What's ironic is that in the age of advanced technology and sophisticated financial analysis, the weather – something entirely out of our control – can have such a profound impact on investment behavior. This insight challenges the traditional belief that investors always make rational decisions based solely on data and financial forecasts.

For investors, this knowledge opens up a new perspective. It underscores the importance of considering psychological factors, like mood influenced by weather, alongside financial aspects of an investment.

However, it is amusing to consider that weather influences investment decision-making. At CrowdedHero, we've observed that during and after COVID-19, there has been a significant increase in the number of retail crowdfunders. Moreover, climate changes are poised to reshape the entire crowdfunding landscape, affecting both consumer behavior and the types of projects offered. This evolving scenario highlights the complex interplay between environmental factors and investment trends, underscoring the need for investors to remain adaptable and insightful in an ever-changing market.

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