Could hot weather prompt you to make poor financial decisions?

A woman mopping her brow with a tissue.

Modern climate reports are filled with superlatives and present a grim outlook for environmentalists and policymakers alike.

2023 was the hottest year on Earth since records began, according to, and Statista reports that 2022 was the hottest year the UK has ever experienced. CNN notes that global temperatures in April 2024 were the hottest ever recorded in that month.

The takeaway is clear: the world is getting hotter.

Beyond the damage to the planet, the effects extend to the human body, with our minds and behaviour patterns equally vulnerable to the ravages of heat.

Hot weather can potentially lead to slower reactions, poor decision-making, and reduced memory and focus, all of which could have ramifications on your financial acumen.

So, with summer already here, read on to find out how heat can influence your financial decision-making and what steps you can take to ensure your wealth is protected during warm weather.

Hot weather can alter the way your brain operates

The human brain, much like a complex machine, operates best at an optimal temperature. When it overheats, cognitive functions can decline, impacting your thinking, emotions, and sleep patterns.

Indeed, a study published by the National Library of Medicine found that moderate air temperatures of 22 degrees were more conducive to accurate brain functions and response time than just a few degrees in either direction.

Research reported by the Guardian found that, during a heatwave in the US, students without air conditioning demonstrated about a 13% longer reaction time on cognitive tests than those with air conditioning.

The brain is comprised of two basic cell types, neurons and glia. Glia provides the structure of the brain, while neurons send and receive signals and messages.

Neurons are sensitive to temperature changes. If they heat up faster than they are able to adjust, their activity and accuracy levels diminish.

This can lead to a reduction in your capacity to focus and your memory capabilities, as well as heightened mood swings. All of which can make it more difficult to approach tasks that require concentration and sound judgement, such as financial planning and long-term decision-making.

Hot weather could lead to poor financial decision-making

Effective financial planning requires calm, collected decision-making and is most successful when you remain unaffected by short-term disruptions, keeping your focus on long-term goals.

So, the effects of hot weather on the brain are not conducive to making sound financial decisions.

As humans, we are prone to cognitive biases that can impact our investments, and hot weather is just one of many factors that can heighten our susceptibility to these tendencies.

For instance, a study reported by CNN found that hot temperatures can heighten irritability, anxiety, and anger.

So, during a heatwave, investors might experience increased stress and anxiety, prompting them to sell stocks prematurely to avoid perceived risks, instead of sticking to their long-term investment strategy. This hasty decision-making can lead to diminished returns and missed opportunities for profit.

That’s why making decisions based on long-term goals rather than short-term factors like temperature fluctuations is often a good idea.

Take care of your body, mind, and finances in hot weather

It’s important to take care of yourself in hot weather by drinking plenty of water, staying out of direct sunlight, wearing suncream, and cooling off where possible.

When it comes to looking after your finances, it is generally advisable to remain patient and to keep focused on your long-term goals, regardless of current external influences – be they political, cultural, or climatic.

But if you do find yourself in a position of needing to make a financial decision during a spell of hot weather, take a moment to have a breather and consider how you might feel on a different day. If the matter isn’t urgently pressing, consider sleeping on it or letting a day or two pass before you decide.

Moreover, don’t be afraid to reach out and ask for advice.

The opinions of your friends, family, and colleagues could be invaluable in offering you an alternative perspective. And, of course, speaking with a financial planner is always advisable, particularly if you think you may not be in the best mindset for making an important decision.

Get in touch

Come wind, rain, or the warmest of shines, we can work with you to ensure your financial plan remains resilient against short-term influences like the weather.

To find out more, please get in touch.

Email or call us on 01189 876655.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.