Index Based Investment Management Services

Blue Ocean Blog

The Blue Ocean Portfolios blog covers various financial and investing topics such as retirement, investing, indexing, financial advising, and more.

Eclipsing the Capital Markets

solar eclipse

The upcoming total eclipse on Monday, August 21st is gaining a lot of attention. My brother-in-law lives under the path of totality outside of Union, Missouri, and decided to use this as a reason to have an eclipse BBQ on Monday afternoon – it’s just like Memorial Day! I also heard of many businesses and schools changing their schedules to accommodate this rare natural regional phenomena. The Missouri Department of Transportation (MoDOT) is estimating that over 1 million visitors will be filing into Missouri for this event and already has posted temporary signs along the interstate highways warning about traffic slowdowns on Monday.

The totality of the eclipse only will only last about 2 ½ minutes – a little bit longer than the Kentucky Derby. A whole lot of hoopla for a few minutes of darkness in the middle of the day. Here is a little bit of eclipse lore.

The first recorded eclipse took place on May 3, 1375, BC in ancient Babylonia. Of course, back then these Babylonians didn’t know it was May 3rd. Thanks to modern astronomical measurements astronomers can calculate the dates of historical and future eclipses using some fairly simple mathematics. Of course, the ability to predict the exact time and place for the next eclipse was valuable to kings and emperors, and a lot of superstitions were born from these rare events. The next time a total eclipse will pass over parts of the St. Louis region will be on April 8, 2024 – so start planning now!

Mark Kamstra, a business professor at York University’s School of Business has studied the effects of daylight patterns on trading activity. Professor Kamstra is predicting that August 21st will be a bad day for the markets because, historically, solar eclipses inspired great fear and with fear comes selling. Personally, I believe that there is no relationship. If the market does go down it would be because the potential buyers are paying more attention to eclipse BBQs and picnics rather than dwelling over the markets. The last total eclipse was on February 26, 1979. The Dow Jones dropped 2 points that day.

If you try to get a hold of us early Monday afternoon, we may be out on the deck adjacent to our office observing, or I might attend my brother-in-law’s eclipse party. So it may be best just to This email address is being protected from spambots. You need JavaScript enabled to view it.. We always have our laptops with us, and we will get right to you if we have not burned the retina out of our eyes.

 

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