Friday, February 3, 2012

Super Bowl Prediction


Pathways Advisory Group, Inc.
Jeff Karst, Associate Planner












It’s time for the Big Game this weekend. Who do you think will win? Many of us have our own prediction of this weekend’s game. However, the prediction that I am talking about is the stock market return based on the Super Bowl winner.
For stock market fortune tellers, there is a Super Bowl Indicator. If the NFC team wins, the stock market will be up for the year. If the AFC team wins, the market will decline. This indicator has been right 80% of the time for the past 45 Super Bowls, surprisingly high (better than a coin flip?). Although, in 2008 the Super Bowl predicted the market would be up.
It seems a little silly to invest based on a football game. If you’re trying to time the market’s ups and downs; you may as well though. If the Super Bowl is lucky enough to be right 80% of the time, are you?
There is an alternative to luck. I prefer a well-diversified, long-term strategy that relies on the fundamental principal that companies will continue to find ways to be profitable. That profit will be shared with investors (and short-term, high-grade bonds will continue to mitigate risk). But, just in case, I will root for the NFC – GO GIANTS!

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