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Should investors be concerned about the Super Bowl Indicator?

  • Writer: John Caserta
    John Caserta
  • Mar 1, 2019
  • 2 min read

(WTNH) - The "Super Bowl Indicator" claims that a win by a team from the AFC signals a bear market, while a win by an NFC team (as well as teams from the original NFL before the merger of the AFL and NFL in 1968) indicates a bull market. Financial Consultant John Caserta answers our questions about the theory.



Where did this theory come from?

* This theory was first introduced in 1978 by Leonard Koppett, a sportswriter for the New York Time.

How accurate is the Super Bowl Indicator?

* According to sources, the Super Bowl Indicator was at one point more than 90% accurate in predicting the performance of the S&P 500 in the following year. But there is a major dispute in the data - the theory includes the Pittsburgh Steelers (who have won the most Super Bowls) as an NFC team (where they started) even though the won as an AFC team.

* And in the past 10 years, the Super Bowl Indicator has been about as accurate as a coin-toss. Most recently, the Broncos and Patriots didn’t predict a down market, and the Eagles win didn’t signal a bull market.

* This theory is more fun than it is serious investment advice or theory. It’s a football game and should not be driving decisions in your portfolio.

So what should investors do?

* The Super Bowl Indicator raises a good point – correlation is not causation. A football game will not determine the performance of the market. And using such info to predict market performance – and worse, make investment decisions – can be problematic.

* It’s important to consider your goals and your appetite for risk – that will help determine how to position your portfolio in a manner that is appropriate for you.

 
 
 

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Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC. Registered Investment Adviser. Member FINRA/SIPC. 600 Dresher Road, Horsham PA 19044. 800-873-7637, www.htk.com. Caserta & de Jongh, LLC is unaffiliated with HTK.  HTK is a wholly-owned subsidiary of The Penn Mutual Life Insurance Company. HTK does not provide legal and tax advice. Always consult a qualified tax advisor regarding your personal tax situation and a qualified legal professional for your personal estate planning situation. 

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Investment advisory and financial planning services are provided by John Caserta, HTK Investment Adviser Representative. Our representatives are insurance and securities licensed in our home state of CT, as well as additional states.  For more information, please contact our office.  This is not an offer or solicitation in any state where not properly licensed.

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