Economist warns August-October as historically volatile period for markets
Owen Lamont of Acadian Asset Management says the months from August to October have repeatedly coincided with major market crashes, urging investors to stay alert.
Senior vice president and portfolio manager Owen Lamont at Acadian Asset Management traced a recurring historical trend that places the most damaging market crashes between August and October, a period he calls "panic season." Citing episodes from the 2007 quant crash, the 2008 Lehman Brothers failure, the 1998 LTCM collapse, and 19th-century panics, he argued that thin trading volumes during summer vacations amplify shocks.
Lamont’s own calculations suggest a roughly 10% likelihood of a major disruption in that three-month span, versus a much smaller chance at other times of the year. In the current summer, he observed unusually calm price action masking large underlying swings, with Microsoft’s market cap rising $450 billion one day and Apple shedding $360 billion the next, as well as heightened daily dispersion comparable to past crises.
He also pointed to anomalies such as SK Hynix’s premium listing as signs of bubble-like behavior. While acknowledging that crashes remain rare, Lamont cautions investors to remain mentally prepared for heightened risk during the harvest period.
Why it matters
Understanding seasonal market risks helps investors and policymakers manage potential volatility.
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