Think your financial portfolio is strictly based on the numbers? A new study published in Social Psychological and Personality Science challenges commonly held beliefs that we are always rational about our financial decisions. According to co-author, Dr. Lisa Kramer, of University of Toronto’s Rotman School of Management, findings indicate that people with seasonal affective disorder (SAD) – and those who experience depression related to seasonal changes – become more risk averse during the colder months.
An experiment conducted on faculty and staff of a large North American University using exercise to simulate the risks and gains of financial investments showed that participants affected by SAD were more conservative in their investments than those who were not affected by this disorder. However, the aversion to risk balanced out when warmer weather returned.
For an interesting perspective, see, “This is Your Portfolio on Winter: Seasonal Affective Disorder and Risk Aversion in Financial Decision Making,” available at www.spp.sagepub.com.