Although there is no cause and effect that any kind of statistics can prove, there are enough who believe in what they call the Super Bowl Halo Effect. According to this belief, the Dow Jones Industrial Average supposedly has a better year whenever the National Football Conference wins the Super Bowl.
If anything, this effect might be more of a superstition than anything else, but that hasn’t stopped even professional investors from trying to document whether the Halo Effect is true.
What Affects Stocks After the Super Bowl
However, two economic phenomena surrounding the Super Bowl have a rather modest effect on the stock market following the game — and that appears to bolster believers in the aforementioned Halo Effect.
The first of these concerns companies that buy advertisements to air during the Super Bowl. And the other has to do with firms that are based in the city where the game is held.
A study by the University of Connecticut found that average returns are higher on stocks in companies based in the city in which a Super Bowl is held, regardless of which team wins the game. This year’s game is in Minneapolis, where the stadium is owned by US Bank.
Which Companies Sponsor the Game
Speaking of being the name sponsor of a bootball stadium, sponsorship of the Super Bowl apparently correlates with a we bit of upside in the stocks of the respective companies, according to that same university study.
Buying stocks in these companies the morning after the game might be too late, however; researching ahead of time which firms would be likeliest to run ads during the game and buying them beforehand might be more effective. It might be safe to assume that the companies that bought ads last year might do so again this year.
A word of caution before you go picking up stocks in likely advertisers: If any of the ads don’t go over well with viewers, there’s a chance that might play out in the stock market the day after the big game.
About Stadium Finance
It’s also worth noting that there is another aspect of finance related to football that doesn’t come up in any of the conversations about the Supre Bowl Halo Effect — perhaps because it’s not stocks but rather bonds, and municipals to be exact.
Yes, muni bonds help finance new stadium construction. But no way do munis’ financial performance have anything to do with the outcome of the Super Bowl, nor any other sport for that matter.
So whether it’s advertisers during the Super Bowl or companies based in the same city as the host stadium, neither seems to be the best justification for buying stocks.
Use Other Criteria for Investing
Hopefully you base your investment decisions on more substantial trends than whether the Super Bowl influences the stock market.
Readers, which team do you plan to root for during this year’s Super Bowl? And where do you plan on watching the game?
Jackie Cohen is an award winning financial journalist turned turned financial advisor obsessed with climate change risk, data and business. Jackie holds a B.A. Degree from Macalester College and an M.A. in English from Claremont Graduate University.