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Winter blues 'affect stock markets'

A surprising potential cause of the current volatility of the global stock markets has been mooted by a Canadian academic, the Guardian reports.

While the credit crunch has held to blame, Mark Kamstra has suggested that Seasonal Affective Disorder could (Sad) also have played its part in recent market fluctuations.

Otherwise known as the 'winter blues', sufferers of Sad feel depressed as the days shorten due to the increased hours of darkness.

A 2003 paper, jointly authored by the professor, measured monthly returns from US government bonds and equities between 1952 and 2004 - and claimed to find a seasonal correlation.

It found that the 'risk free' bond market peaked in October and touched bottom in April - the exact opposite of the much more volatile equities market.

"We believe depressed, risk-averse investors move into Treasuries and out of equities with the onset of Sad in the early [autumn], pushing Treasury prices up and equity prices down, Professor Kamstra told the Guardian.

"The pattern reverses in the early spring with the recovery of Sad sufferers."

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