September 6, 2018, 10:45 am

How Your Time Zone Can Affect Your Profits

by: The Financial Blogger    Category: Miscellaneous
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It seems that time is indeed money, in the truest sense of the word. It has long been acknowledged that one of the main reasons London is the financial centre of the world is due to its favourable position in the global time zone map. Greenwich Mean Time (GMT) means that when traders are active in London, they will also be sharing active trading hours with financiers in New York, San Francisco and even Tokyo.

The flip-side of this is that those working in unfavourable, inconvenient time zones such as those all the way out in Australia or New Zealand are at a disadvantage when it comes to participating in global trade, as their active trading hours are mostly when the rest of the world is sound asleep. Here’s how living in the right time zone can maximise your profits.

Source: Pixabay

Communication is Key

The timezone conundrum stretches beyond just being able to participate in day trading with major stock exchanges around the globe. Say, for example, if a company that manufactures goods in San Diego gets its parts from China and its design expertise from Sweden; if an issue arises in the middle of the working day, that Californian businessman is going to have a lot of trouble getting a quick response from co-workers in their global supply chain.

If you’re living in a time zone such as Brussels, then this problem is less likely to arise, as you’ll be able to make contact at almost any time of the day with the knowledge that people you depend on who are located on another continent should at least be conscious and able to respond to any urgent query you might have. When so many supply chains these days are structured in a “just in time” manner, having to wait hours for a solution can be catastrophic for your profits.

Productivity

More recent research has begun to focus on how productivity is affected by people’s time zones. Countries such as Spain and Finland are even attempting to change their time zones in an attempt to raise worker productivity and overall wealth. Put simply, you may be using a trading platform that allows you to connect with trade from anywhere on the planet but, if your time zone means that you’re waking up too early due to earlier sunlight, you’re more likely to be tired during the working day, and therefore working less. The science is there to suggest that the impact on productivity is real, which might explain why more ideally-located timezones such as New York and Munich have some of the highest productivities in the world.

Source: Pixabay

Overcoming Distance

No matter how increasingly interconnected global finance and trade becomes, it seems we are still limited by geography in many respects. However, this limit is an arbitrary one, as time zones are entirely man-made creations which are losing credibility fast. Creating a more business-friendly, realistic time zone system, or even abolishing it altogether, could have significant positive impacts on trade, investment and prosperity.

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