Why Investors Should Root for the St. Louis Cardinals in the World Series

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Call it the Cards Championship Effect: Historically, when the St. Louis Cardinals win the World Series, the stock market tends to go through the roof the following year.

Your team may have been out of the running for the Major League Baseball championship weeks, or even months ago. You may hate both the Cardinals and the Boston Red Sox, who meet up in the World Series starting this week. Heck, you might even be a Red Sox fan. But if you’re an active investor in the stock market, or just have a 401(k), there’s reason to hope for a Cardinals victory.

As CNBC noted in 2011, when St. Louis was last in the World Series, in nine out of the ten years after the Cardinals had claimed the crown, the Dow Jones Industrial Average posted a gain, with an average return of 13%. The Cardinals won their 11th championship in 2011, defeating the Texas Rangers in seven games, and yet again, the market did well the following year, with the Dow up 7% in 2012.

(MORE: A Hater’s Guide to the 2013 World Series)

Now that the Cardinals are back in the World Series, the St. Louis Post-Dispatch is informing Cardinal Nation—and the entire nation, really—that there’s extra reason to cheer on the team. After factoring in 2012, in the 11 years after the Cards have won the World Series, the Dow Jones has risen an average of 12.4%. That’s by far the biggest average increase among teams with more than a couple world championships. After Red Sox World Series victories, by contrast, the Dow has been mostly flat, averaging an increase of a pathetic 0.2%.

Does this mean that if you believe in a Cardinals victory, you should not only be placing bets on the team, but also be going all in on the stock market? Of course not. There’s no rhyme or reason to the Cards championship stock market phenomenon. As the Post-Dispatch put it, the Cards-Dow analysis is “merely a product of humans’ tendency to look for patterns in random data. There may be correlation, but there’s clearly no causation.”

Observers have noted all sorts of weird stock market indicators, with factors such as the length of women’s hemlines, whether or an American-born model appears on the Sports Illustrated swimsuit issue, and whether an NFC or AFC team wins the Super Bowl seen as somehow correlating with what’s going to happen in the stock market.

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While fun to talk about, these indicators are essentially all hogwash. Besides, as any investor—or sports fan—should know, past performance is not indicative of future results. So feel free to root for whoever you like in the World Series. (But if you don’t really care one way or the other, go with the Cardinals; all of our retirement portfolios depend on it.)

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