Some of the most controversial research in behavioral finance attempts to test whether investor mood affects prices. Mood research is controversial because the existence of the proposed mood effects implies profitable trading strategies that do not seem consistent with arguments for market efficiency. This view is also controversial because it is so closely related to the central idea of behavioral finance in that something other than expected future dividends and risk affects stock market prices. if mood and emotions influence decisions, economists have much work to do (Shumway)
