Who Should Investors Root For in the Super Bowl?
By: Michael Flannelly · February 02, 2023 · Reading Time: 5 minutes
The Philadelphia Eagles and Kansas City Chiefs will meet in Glendale, Arizona, on Sunday, February 12, to compete in Super Bowl LVII. This showdown between Jalen Hurts and the Eagles and Patrick Mahomes and the Chiefs pits the top seeds from the National Football Conference (NFC) and American Football Conference (AFC).
Every year, millions of people around the world tune in to watch the Super Bowl, and this year is no exception. Fans of Philadelphia and Kansas City will be on the edge of their seats watching, but so will casual football fans and people just interested in the advertisements that cost millions of dollars.
And even some investors may be watching, perhaps rooting for an Eagles victory. That’s because some say that the big game’s winner could also impact the stock market. Enter the Super Bowl Indicator, a theory that suggests a correlation between the outcome of the Super Bowl and the performance of the US stock market for that year.
What Is the Super Bowl Indicator?
The Super Bowl Indicator is a stock market theory that claims a correlation between the outcome of the Super Bowl and the performance of the US stock market for that year. If a team from the NFC wins the Super Bowl, the theory states that the stock market will perform well for the year. In contrast, if a team from the AFC wins, the market will perform poorly.
However, economists and investors do not consider this theory a reliable market indicator; it is mainly used as a playful and superstitious observation. In fact, the Super Bowl Indicator has a mixed track record, and many analysts use different criteria to measure the correlation.
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History of the Super Bowl Indicator
The origin of the Super Bowl Indicator dates back to the 1970s when sportswriter Leonard Koppett first noticed a correlation between the outcome of the Super Bowl and the performance of the US stock market. Koppett wrote about the observation in an article, and it quickly gained popularity among investors and football fans.
Since then, the Super Bowl Indicator has been a topic of discussion every year, with investors and economists tracking the stock market’s performance after the Super Bowl to see if the correlation holds true.
Super Bowl Indicator Is No Touchdown
The Super Bowl Indicator has shown a slight correlation that if a team from the NFC wins, the stock market performs well, and if an AFC team wins, the stock market performs poorly.
For example, the Indicator has proven correct in nearly 54% of the previous 56 Super Bowls when tracking the S&P 500 Index. When looking at the Dow Jones Industrial Average (DJIA), the indicator is correct about 59% of the time.
|A Look at the Super Bowl Indicator Over the Past 10 Years|
|Super Bowl||Year||Winner||Conference||S&P 500 Price Return||Correct Prediction?|
|LVI||2022||Los Angeles Rams||NFC||-19.44%||No|
|LV||2021||Tampa Bay Buccaneers||NFC||26.89%||Yes|
|LIV||2020||Kansas City Chiefs||AFC||16.26%||No|
|LIII||2019||New England Patriots||AFC||28.88%||No|
|LI||2017||New England Patriots||AFC||19.42%||No|
|XLIX||2015||New England Patriots||AFC||-0.73%||Yes|
Sources: Pro Football Reference; Slickcharts
However, the echo chamber on the internet may have you believe the relationship between the Super Bowl winner and the stock market is stronger than the results mentioned above. That’s because when looking at the Super Bowl Indicator, many analysts use a different definition of what constitutes a team from the NFC. Koppett and many others included any team that originated in the NFL before its merger with the American Football League (AFL) but switched over to the newly formed AFC. These teams include the Pittsburgh Steelers, Baltimore/Indianapolis Colts, and Baltimore Ravens (who originated as the Cleveland Browns).
When you include these teams in the Super Bowl Indicator formula (meaning that a win by these teams will lead to an up market for the year), the indicator is right about 68% of the time when tracking the S&P 500 and 73% of the time when tracking the DJIA.
How Else Does the Super Bowl Winner Affect the Stock Market
In the years following a win by an NFC team, the stock market performs slightly better than the years following a win by an AFC team. But again, that does not mean that the Super Bowl winner affects the stock market’s performance; it’s more of a coincidental relationship.
Since the first Super Bowl in 1967, the S&P 500 and DJIA have increased an average of 10% annually in the year following a win by an NFC team. In contrast, the S&P 500 rose an average of 7% in the year following a win by an AFC, while the DJIA increased by an annual average of about 6%.
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Despite its lack of credibility, the Super Bowl Indicator continues to be a popular and playful observation among investors and football fans. It’s a fun way to engage with the stock market and adds an extra layer of interest for those interested in both football and the stock market. So both Philadelphia fans and investors may be pulling for an Eagles win this year.
The Super Bowl Indicator is not a reliable market indicator and should not be used to make investment decisions. While it’s a fun theory, investors should focus on more substantive and credible factors when making decisions about their portfolios. If you want to build a financial portfolio based on your preferred investment strategy, SoFi can help. With a SoFi Invest® online brokerage account, you can create a portfolio of stocks and exchange-traded funds (ETFs) with no commission for as little as $5.
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Photo credit: iStock/Talaj
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