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There is a famous study in which judges are found to hand out harsher sentences before lunch rather than after lunch.

In the study, decisions that are taken by a group of Parole Board judges are tracked according to how recently they ate. The study found that the longer the time from eating, the less forgiving the judges. The case is used to support a wide variety of theories, including how our free will is limited to when we last ate.

It therefore should follow that the ‘risk appetite’ (for investments, not lunch) will vary according to the time of day you make your decision. Yoke’s approach of separating out different risk appetites into short and long term reserves to reflect an investor’s horizon helps to ameliorate this a little, but a better solution is to settle on risk appetites that seem right both before and after lunch. Doubtless, this is even truer when we eat too much over the festive season.

(Perhaps sadly) the research is considered unreliable; another explanation for the judges’ pre-lunch dip could be that difficult Parole Board cases were taken at the beginning of a session (in case they overran), leaving the quicker, ‘flat no’ cases, until later. Or, as you may have noticed, society doesn’t experience a series of catastrophic decisions every day at 11:45 am. 

Obviously, we at Yoke never make important decisions on an empty stomach.

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