While the Philadelphia Phillies’ 6-1 victory in Game 1 last night may not bode well for the New York Yankees, perhaps it may not necessarily be a bad sign for market bulls.
Although the markets have done well in years that the Yankees have made it to the World Series (see Why the Market Root for Yankees), investors may have even more reason to cheer for a Phillies championship.
Since 1950, the World Series has been held 58 times (recall the 1994 World Series was cancelled due to the MLB lockout). The American League, which has won 55% of the World Series titles during that period, has held a slight edge over the National League, which has been victorious 45% of the time.
In years that an American League team has been crowned world champion, the Dow has gained 5.80% on average that year. However, when the National League champion has won the World Series title, the Dow has rallied a more striking 10.77% on average.
While those numbers are impressive, remember the World Series always occurs in the fall. As a result, often times, much of the markets’ gains or losses have already been incurred by the start of baseball Fall Classic.
However, the trend continues in the year after the World Series is won too – as teams defend their world championship. When American League teams win the World Series, the Dow is up an average of 5.94% in the following year. On the other hand, when National League teams are crowned baseball’s champion, the Dow is rises a stronger 9.24% in the year they defend their title.
So far this year, the Dow is up a solid 13%. If the National League’s Phillies can hold off the Yankees and win another three games for their second straight championship, perhaps investors can hope that it might be a sign of better things to come for the markets in the coming year too.
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