|Pathways Advisory Group, Inc.|
Evon Mendrin, CFP®
The Big Game is just around the corner, and you know what that means - stock market predictions!
Our very own Jeff Karst wrote back in 2012 how successful the Super Bowl has been at predicting how the stock market performs through the rest of the year. The "Super Bowl Indicator" predicts that if the NFC team wins, the S&P 500 will be up for the year. If the AFC team wins, the S&P 500 will decline. Eight years later that track record continues with an outstanding 76% success rate! With that kind of success, who needs economists?
However, what that really shows is we can find a connection and correlation between any two things if we really wanted to. Take the Sports Illustrated Swimsuit Issue Indicator or the Men's Underwear Indicator as further examples - we often try to find connections where it's simply pure coincidence.
As Jeff writes, it's silly to base our investments on the results of a football game. The preferred way, he says, is a well-diversified, long-term strategy that relies on the fundamental principal that companies will continue to find ways to be profitable.
But just in case - let's go 49ers!