Activity In Brain’s Risk Circuits Can Forecast Changes In Stock Prices

According to a new study published today in JNeurosci, it may now be possible to forecast changes in stock prices by examining brain activity in regions associated with anxiety and risk-avoidance. “Scientists could accurately forecast market price changes based on the average brain activity among a group but failed when using only prior stock trends or people’s investment choices,” reports SciTechDaily. From the report: Participants examined real stock price trends from 2015 as they decided if they wanted to buy or sell the displayed stocks. During the task, the researchers used fMRI to measure activity in the nucleus accumbens and anterior insula, areas involved in seeking reward and avoiding risk, respectively. Using the group’s average brain activity in these regions, the researchers could forecast how a stock would behave. Increased nucleus accumbens activity forecast when a stock’s price would increase the next day, while increased anterior insula activity forecast when it would flip or change direction. Prior stock market trends and the participants’ own investing choices could not forecast stock price dynamics.