Is Your Portfolio Full Moon-Proof? Asking for a Friend.

If there’s one thing investors hate more than a market crash, it’s not knowing why it happened.

Enter astrology…. yep…

The growing trend that claims planetary movements and moon phases could somehow sway market behavior. It might sound like something ripped from the pages of a sci-fi novel, but some investors believe there’s more to it. After all, if the moon can control the tides, why not the ebb and flow of market sentiment, right? Or (hear me out) this could just be another excuse for bad decision-making.

Still, enough buzz surrounds this concept that it’s worth a deeper look. So, is tracking new moons, full moons, or retrogrades just cosmic fluff, or is there actually something to these celestial theories? Let’s examine.

The Moon’s Influence on Human Behavior: A Logical Starting Point? 🌖

Before you write this off as lunacy (pun intended) consider the ways the moon already influences our world. Its gravitational pull commands waves and tides, and studies suggest it may also impact sleep cycles, animal behavior, and even human emotions. Could it be that this influence quietly extends into financial decision-making?

Here’s why believers think it might: stock market behavior is driven by people, and people can be irrational. Lunar phases (the classic new moons, full moons, and eclipses) are seen as emotional triggers. Proponents claim these phases could create subtle psychological shifts in traders, whether it’s increased risk-taking, fear, or a sharp pivot in market sentiment.

Does that mean moon phases are directly causing market changes? Not necessarily. It could just be one of those “it feels true, but…” coincidences. Let’s keep digging.

Correlations Between Moon Phases and Market Trends: What the Data Says 📊

This isn’t just a trend born on TikTok (though, let’s be honest, social media has boosted its visibility). Researchers have tried to study whether significant patterns emerge between lunar phases and stock markets. Here’s what they’ve found:

1. Full Moon Declines
   Some studies have suggested that stock markets tend to underperform slightly during a full moon compared to new moons. The “theory” is full moons might trigger increased caution or even pessimism among traders, leading to less aggressive buying activity.

2. New Moon Positivity
   Conversely, new moons are often linked to optimism and increased risk tolerance. Traders may engage in higher-volume transactions or speculative plays during new moons, hypothetically driving up market activity.

3. Lunar Anomalies in Economic Papers
   A 2006 study published in the Journal of Empirical Finance claimed lunar phases correlate with stock returns in dozens of global markets. The researchers’ controversial conclusion was returns during new moon periods were statistically higher than during full moon periods. Did that mean traders should consult a lunar calendar instead of technical charts?
   Probably not - but it made for a fun headline.

You know TradingView, ye that big trading platform, they have a trading indicator showing moon cycles…

Where Believers and Skeptics Clash 🌌

Believers argue that the previously mentioned correlations are too consistent to ignore. They often point out that markets are fueled by human emotions (fear, euphoria, and everything in between). If the moon affects emotional states, it stands to reason that it could trickle into financial decisions.

However, skeptics aren’t convinced (me). They argue:

• Market Noise: Stock markets are subject to countless variables, from geopolitical events to weather disasters. Isolating the moon’s impact is like trying to predict stocks based on horoscopes.

• Selection Bias: When investors study correlations like these, there’s always a tendency to find patterns to fit the narrative. Did the market dip after the lunar eclipse? Sure, but so did a dozen other factors, like poor earnings or rising crude oil prices.

• No Causal Proof: Even seemingly compelling data lacks causation. Just because the market tends to perform better during a new moon doesn’t mean the moon makes it happen. It could easily be a coincidence, amplified by the power of suggestion.

Why Are People Turning to Moon Phases in Investing? 🌔

Despite the skepticism, financial astrology (moon phases included) is building momentum…

1. Emotional Reassurance
   Investing is stressful. Turning to the stars (or the moon) gives people a sense of control, even if that control is, well, questionable. The thought of “this full moon is why my portfolio dropped” might be easier to stomach than hard truths about market volatility.

2. Timing and Patterns
   People naturally look for patterns, especially in volatile environments like the stock market. Lunar phases offer a strikingly visual cycle that makes them appealing for those craving some predictability.

3. Social Media Influence
   Platforms like TikTok and Instagram have exploded with creators blending financial advice with astrology. While fun, these viral theories often oversimplify complex market dynamics.

Should You Bother Tracking Moon Phases? 🌚

I can’t believe I am saying this, but, Maybe, but only for fun.

1. Market Fundamentals Are Still King
   Earnings reports, interest rates, economic indicators, and geopolitical events are far more reliable predictors of market behavior than whether it’s a waxing gibbous. If you’re serious about investing, focus on these pillars.

2. Astrology as a Supplement, Not a Strategy
   If moon phases inspire you to reflect on your trading habits (perhaps curbing impulsive decisions during full moons) there’s value in that self-awareness. Just be sure the bulk of your strategy stands on solid financial ground.

The Verdict: Stars Align, But They Won’t Do the Math 📉✨

So, does the moon dictate market behavior? Not really. It’s more of a curious coincidence than a causal relationship. While it's fun (and sometimes eerily accurate) to wonder if your portfolio tanked because of a lunar eclipse, real investment decisions require real tools like data analysis, diversification, and risk management.

But hey, if tracking moon phases adds a bit of excitement to your investment journey, there’s no harm in checking a lunar calendar alongside your stock charts. Just remember, whether the moon is full or new, the market will still try and take your money. 🌙