Investors more risk-averse in winter than summer: Study
There's some evidence that the stock market's performance is tied to the time of year and even the days of a month.
But, as the leaves change, you may actually want to pay more attention to your own seasonal clock, says U of T finance professor Lisa Kramer.
People with seasonal affective disorder (SAD) tend to stick to safer investments in the fall and winter when days are growing shorter but take bigger risks with their money in summer, she believes.
SAD is a disorder that causes varying degrees of depression due to reduced levels of daylight; it affects about 15 per cent of Canadians, to varying degrees.
Kramer came to this conclusion after asking subjects in an experiment what portion of their $20 study participation payment they would like to invest. The invested amount had equal chances of paying back 110% or nothing so if a participant chose to invest all $20, he would receive either $42 or $0.
The researchers asked participants in July, December, and the following July how much they would put up.
Everyone, particularly those with seasonal affective disorder (SAD), put less money at risk in December and more in each July.
While the researchers expected SAD sufferers would be more risk-averse in winter, they were surprised all study participants exhibited a similar pattern during the darker months.
Does your mood shift as the cold weather approaches? Do you find yourself becoming more more risk adverse as a result?
By Gordon Powers, MSN Money
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