While Tom Brady's Super Bowl rings have helped bring him great wealth, he's been a negative indicator for the stock market.
The New England Patriots of the American Football Conference will face off against the Los Angeles Rams of the National Football Conference tonight at 6:30 PM eastern time. History has it that, in years when the Patriots win the Super Bowl, the average S&P 500 return is roughly 1.5%, according to data compiled by LPL Financial, far below its historical annual average of more than 8%. This period dates back to 1986, the first year the Patriots made the Super Bowl.
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In the Tom Brady and Bill Belichick era, the S&P 500 has had an average annual return of -3%, but of course this era includes 2008's -37% return as the financial crisis set in, and 2018's -6.2% return.
Moreover, the Patriots are an AFC team, and years in which the AFC team wins the big game usually see a much lower S&P 500 stock return than years in which the NFC team wins. When the AFC team wins, the average full year return for the index is 5.8%, versus 10.2% if the NFC team wins. There have been 15 up years and 6 down for the index when there's an AFC champion and 22 up years and 9 down years with an NFC champion.
Of course, "this indicator has no connection to the stock market, but the data don't lie-the S&P 500 index has performed better, and posted positive gains with greater frequency, over the past 52 Super Bowl games when NFC teams have won," wrote Ryan Detrick, senior market strategist for LPL Financial. He noted the NFC's Philadelphia Eagles won the Super Bowl in 2018, but the S&P fell 6.2% for the year. And the NFC's New York Giants won in 2008, when the market fell 37%.
"We realize these calculations are in no way relevant to investors," Detrick said, but of course, if history is any guide, the market will underperform its historical average if Brady and company win on Sunday.