Let’s have a little fun – can the winner of the Super Bowl game predict the stock market’s next move? Well, the “Super Bowl Indicator” is a superstition that says that the stock market’s performance in a given year can be predicted based on the outcome of the Super Bowl of that year.
WHAT ARE THE EXPLAIN THE ORIGINS OF THE SUPER BOWL INDICATOR?
In 1978, Leonard Koppett, a sportswriter for The New York Times, believed he had discovered a reliable stock market indicator.
HOW DOES THE INDICATOR WORK?
- This concept states that if a team from the American Football Conference (AFC) wins, then it will be a bear market (or down market),
- But if a team from the National Football Conference (NFC) wins, it will be a bull market (up market).
OK, LET’S BREAK DOWN THE RESULTS – HOW ACCURATE HAS THE SUPER BOWL INDICATOR BEEN?
As of January 2017, the indicator has been correct 40 out of 50 times, as measured by the S&P 500 Index – a success rate of 80%.
BUT LET’S BE CLEAR, YOU SHOULDN’T BET YOUR INVESTMENT STRATEGY ON THE SUPER BOWL?!
- Remember the old maxim: correlation does not imply causation.
- In 2008, despite the New York Giants (NFC) winning the Super Bowl (indicating a Bull Market), the stock market suffered one of the largest downturns since the Great Depression.
- More coincidence than connection.
- The Patriots have won 5 Super Bowls. The indicator for an AFC victory was: 3 right, 2 wrong.
- Construct your portfolio with science and a long-term perspective.
The Philadelphia Eagles (NFC) won the 2018 Super Bowl so let’s cross our fingers for some good Bull Market karma this year!