Your clients hate winter

By Melissa Shin | September 15, 2011 | Last updated on December 5, 2023
2 min read

People are more risk-averse in winter than summer, says a new study.

The researchers, Lisa Kramer of the Rotman School of Business (Toronto) and J. Mark Weber of the School of Environment, Enterprise, and Development (Waterloo), had subjects undergo a “Safe Asset Versus Risk (SAVR) Task.” They asked participants in July, December, and the following July what portion of their $20 study participation payment they would like to invest. The invested amount had equal chances of paying back 110% or -100%, so if a participant chose to invest all $20, he would receive either $42 or $0. If he only invested, say, $8, he’d be guaranteed $12 and the $8 would become either $16.80 or $0.

Everyone, particularly those with seasonal affective disorder (SAD), put less money at risk in December and more in each July. While the authors hypothesized SAD sufferers would be more risk-averse in winter, they were surprised all study participants exhibited investment trepidation during the darker months.

“This highlights how important emotions are in financial decision-making,” says University of Toronto professor Lisa Kramer, co-author of the study. “Risk aversion varies through the year. Somebody who sets his or her portfolio allocation in the summer has to be aware the portfolio is going to feel riskier in the winter. Advisors and clients need to have a conversation about that.”

Previous studies have shown SAD to be a factor in moving stock markets in fall and winter, and other work has demonstrated higher demand for low-risk U.S. Treasury securities in the fall and lower demand in the spring. This study is the first to examine how seasonality affects risk aversion at the level of an individual investor.

To see how your client would fare on the SAVR test, click here.

Melissa Shin headshot

Melissa Shin

Melissa is the editorial director of and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at You may also call or text 416-847-8038 to provide a confidential tip.