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By Jason Simpkins
As Super Bowl Sunday approaches, gamblers worldwide are placing their bets. But nervous investors already have their own bets riding in the increasingly whipsawed U.S. stock market, and many are probably too distracted to worry about anything as trivial as a football game - even if it is the Super Bowl.
But those investors should pay very close attention to Sunday’s game between the New England Patriots and the New York Giants. And here’s why.
According to the "Super Bowl Indicator," if the team that wins has roots reaching back to the original National Football League, the stock market will have a good year. But if the victor isn’t a descendant of a charter-member NFL team, well, expect to get sacked for a loss.
The theory may seem preposterous, and indeed the system has its flaws. In 2006 and 2007 both teams had their roots in the original NFL, so the game was meaningless in that the market was expected to rise no matter who won. And, of course, the market did rise in that time period.
However, the reality is that the Super Bowl indicator has correctly predicted the direction of the Dow Jones Industrial Average in 33 of the 41 years the game has been played. That’s an astonishing 80% success rate.
This year, odds-makers are favoring the undefeated New England Patriots, champions of the AFC, and, therefore, a team that cannot trace its origins back to the original NFL. On the other hand, the Patriot’s opponent, the underdog New York Giants, were formed in 1925, and have long been a staple in the NFL.
So, if the Giants manage to squeak out a win Sunday, the championship parade might just include a touchdown-celebration dance on Wall Street [For a related article on the "January Barometer Theory," which includes several strategies for managing your investments during turbulent markets, please click here].
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And now a word from the 'Super Bowl Indicator'