The world is just a few weeks away from one of its favorite pastimes: the Winter Olympics. In every corner of the globe, our eyes will stay glued to Pyeongchang, South Korea — and new research says it's going to have a strange effect on the stock market.
England's University of East Anglia and Nottingham Trent University just announced a study investigating the relationship between how a nation's Olympic performance affects its trading activity. This didn't come out of nowhere; as it happens, the better your country's Olympic athletes do, the less we focus on the stock market. It's not so much that we're riding high on a tide of bronze, silver, and gold emotions. We're just that distracted.
The researchers found that while market prices don't shift that much, volume goes noticeably down. This actually makes for a great opportunity for buyers. It focuses on volatility trading strategies, which look at the differences between what we expect from a stock and what it's actually doing. When we're not paying attention to the market, otherwise reliable predictions become a little wonkier, which creates openings to get in on a good trade.
This is definitely one of those things that makes the stock market sound more confusing than it has to be. But don't be afraid to talk to your money manager about the possibilities for trading during the Olympics. The whole world is feeling more competitive during the games — you can definitely go for gold too.