Top economist says it’s ‘panic season’ in markets and it’s your fault for taking summer vacation. Blame the ‘harvest time’ mentality

August is known as "panic season" in financial markets, according to Owen Lamont, a senior vice president and portfolio manager at Acadian Asset Management. Lamont, who has a background in economics from prestigious institutions such as Harvard, Yale, and Princeton, believes that market crashes tend to happen during the August-to-October time frame.

This pattern has been observed throughout history, with major financial crises occurring during these months, including the quant quake of August 2007, the Long-Term Capital Management collapse in September 1998, and the Lehman Brothers bankruptcy in September 2008.

Lamont attributes this pattern to a centuries-old "harvest time" mentality, where market liquidity is thin due to traders taking summer vacations in the Northern Hemisphere. This makes it difficult for the market to absorb sudden trades, leading to increased volatility. He argues that the pattern can be traced back to America's agricultural economy, where farmers needed time off during the summer harvest season, causing money to flow from East Coast cities to Western agricultural regions.

This historical pattern has been recognized by economists such as William Stanley Jevons and Oliver Mitchell Wentworth Sprague.

Lamont warns that there is a 10% chance of an epic disaster between August and October, while the chance of such a crisis occurring from November through the following July is only 2%. Despite the low likelihood, investors are encouraged to be mentally prepared for potential outsize risks during this period. Lamont's observations continue to be relevant, even as the year progresses, with the S&P 500 exhibiting unusual levels of volatility in late August 2026.