Looking for a winning bet on this year’s Super Bowl? Buy stocks.
That’s the conclusion of a tongue-in-cheek analysis by Capital IQ, a unit of Standard & Poor's, that looked at correlation of stock market performance to the past winners of the NFL championship game.
The results of the analysis show that the upcoming matchup of the Pittsburgh Steelers and the Green Bay Packers should produce a no-lose bet on stocks. In the past, the U.S. market rose by more than 20 percent in the year following a Super Bowl played by either team.
The average annual return for the S&P 500 index when the final game includes the Steelers is 25 percent; if they win, market returns average 26 percent, according to the study. Even when Pittsburgh lost Super Bowl XXX in 1996, the market rose 23 percent the following year.
When the Packers play the Big Game, the stock market gain averages 24 percent. When they’ve won, the market rose an average 23 percent; when they’ve lost, the gain was 29 percent, the study said.
Say what you will about the Chicago Bears playoff performance Sunday, the record shows they just don’t measure up when it comes to stock market performance. When the team won its Super Bowl in 1986, the market rose just 19 percent. Stocks gained 5.5 percent after the Bears' loss in 2007.
The hapless New York Jets, who lost to the Steelers in the AFC finals Sunday, are no help at all to investors. The S&P 500 fell 8 percent after their one and only Super Bowl appearance in 1969, according to the study.
Odds makers looking to handicap this year’s outlook for stocks might want to factor in a few other variables tracked by the folks at Capital IQ, including this year’s Super Bowl venue, Dallas. Games played in Texas brought an average 8 percent decline in stocks - the worst performance of the eight states that have hosted the NFL's final game. Throw in another 3 percent decline for domed stadiums like the site of this year's game.
On the hand, both teams have already won the Super Bowl at least once; the average market return after a repeat victory by a past winner is 13 percent, the study said.
To be sure, there’s no conceivable connection between the outcome of a single football game and the 12-month outlook for the 500 stocks that make up the S&P index. As your broker usually mumbles as he’s touting his latest recommendation, “past performance is no guarantee of future results.” Capital IQ says as much in a disclaimer, noting that the analysis is “not intended as a basis for investment decisions.”
Still, over the years, the so-called “Super Bowl” indicator has had a better predictive record than many Wall Street analysts.