Does the Pittsburgh Steelers' victory over the Seattle Seahawks in Superbowl XL indicate a bull market for 2006?
Thousands watched from the stands, millions upon millions more followed the action on TV as the 40th National Football League championship - and, some wags suggest - the direction of the stock market in 2006 was decided.
As you know, the Pittsburgh Steelers defeated the Seattle Seahawks on February 5, 2006, bringing the Vince Lombardi trophy back to Pittsburgh: And, so the "Super Bowl Predictor" says, a good year for the stock market is ensured.
If you adhere to this theory, you can forget CPI Reports and advance–decline ratios; you can ignore not only M1, but M2 and M3 as well. All you need to know about the stock market is this: If a team from the original National Football League or the NFC wins the Super Bowl, the stock market, as measured by such popular averages as the S&P 500, the Dow Jones Industrial Average, and the New York Stock Exchange Composite, will rise over the course of the year. If, on the other hand, a team from the old American Football League or the AFC wins, we're in for a "bear" or down market.
The evidence for the Super Bowl Predictor is pretty impressive. Extending back to 1967, when the NFL's Green Bay Packers triumphed in the inaugural Super Bowl, the Predictor has failed only seven times in 39 previous pigskin classics to accurately prophesy the future direction of the market. That's an accuracy rate of 83%. If you know of any other forecaster or forecasting tool that's better, please contact us.
Or, better still, you could ignore fanciful theories of market prediction and timing and trust in the historically proven benefits of long term investing. Of course, past performance is not a guarantee of future results. But why not start out by perusing the Mutual Funds section of our site?
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