'Today is a 7': A Test of Investing using Astrology

Abstract

Researchers continue to discover, and to try to explain the underlying causes of, market anomalies. Astrology is a system many people use to predict the future, and to guide their choices; it has an ancient pedigree and a wide popular following. Astrological methods have also been applied to stock picking, and there are numerous websites and how-to guides available to plot one's detailed horoscope in order to improve trading, or to apply astrological expertise directly to companies to offer insight into their strategy and future prospects. This paper examines whether there is an economically significant 'astrological' effect for stocks; in particular, does knowing a company's astrological sign lead to better portfolio returns. Findings indicate that a company's sun sign, by itself, does not differentiate the behavior of stock returns in an economically useful way.