Super Bowl Stock Market Indicator

In case you have run out of investment ideas, you might want to read the article at Yahoo! Personal Finance on what the Super Bowl can teach you about investing.

Gains For Dow.
According to the Super Bowl Stock Market Indicator, a victory by an old NFL team means that the Dow Jones Industrial Average will have gains in the following year. Given that both the Chicago Bears and Indianapolis Colts are old NFL teams, things are looking up for the Dow.

While it would be extremely risky to base any financial decisions on an indicator such as this, it does have a surprising track record for success. According to the article, the indicator has been correct after 31 of the 40 Super Bowls, incorrect five times and had inconclusive results four times. If you are right with your stock selections 31 out of 40 times, you stand to make a considerable amount of money if you cut your losses early.

Throwing Darts.
While it would be on par with throwing a dart at the stock tickers to decide your next purchase, this indicator is very interesting and does seem to have some level of validity. Unfortunately the Super Bowl Stock Market Indicator has struggled in recent years, with seven of the incorrect or inconclusive results occurring in the last nine years. Clearly, it would not be wise to put your retirement hopes in the faith of this indicator.

Mad Money.
If you are in a position where you have a little mad money, as Jim Cramer calls it, then it might be interesting to experiment with this indicator to see if there is any truth. When both Super Bowl teams are old NFL teams, which is the case this year, the Dow has gone up every time with an average gain of 18%. I think I will be adding some of the ETFs and index funds that track the Dow to my watchlist.

What are your thoughts on the Super Bowl Stock Market Indicator?