Blue chip wrote a post · Nov 22, 2022 15:35

Will 2022 World Cup open a window of opportunity for investing?

I used to think that avid football fans would be too focussed on World Cup tournaments and too tired after staying up late to catch live matches, that they would ignore the stock markets the next day after matches of their favourite teams, especially if they became disheartened after their favourite teams lost.

I read a study that found that on average after a nation’s football team lost in the World Cup, its stock market the following day would yield a below-average return, and the global stock markets tended to underperform during World Cup tournaments.

Were this true, there would have been arbitrary opportunities abound for buying during a World Cup season and wait out for market recovery after the tournaments ended.

I believe that any such effects would be insignificant and dwarfed by other major macro events that rational investors are certain to turn their attentions to even during the heights of a World Cup, such as FOMC rate decisions affecting global economy, geopolitical tensions leading to crude oil and energy price surges, and supply chain disruptions due to resurgence of COVID-19.

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