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The Boston Snow Indicator

This simple, one-for-one indicator suggests that a white Christmas in Boston means a rise for stocks the following year. The most common example is in 1995, when more than 11 inches of snow fell on Boston. In 1996, the S&P was up more than 20 percent, and the Dow increased more than 26 percent, so what’s the correlation?

In reality, there is no statistical correlation between Boston’s Christmas snowfall and positive performance in major market averages, which is why it is also called the “BS Indicator,” named by some NY Yankees fans on Wall St.

In the past 30 years, Boston has seen 9 White Christmases, according to the Farmer’s Almanac. In the years following, the S&P 500 was up 5 times (+14.99 on average), and down 4 times (-7.83 on average). It seems the Boston Snow Indicator may be more of a coin toss and less of a solid indicator.

Photo: AP