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For Stock Market Returns, Root for the Yankees


History shows a New York win in the sixth game is ideal for the market.

Tonight at Yankee Stadium, Pedro Martinez will take the mound for the Philadelphia Phillies against Andy Pettite of the New York Yankees. The Yankees are leading the series 3-2 and have a chance to win their twenty-seventh World Series. If they lose and the Phillies tie it up, the seventh and final game will air on Fox (NWS) on Thursday night.

Since I'm a diehard Los Angeles Angels fan, a Yankee hater, and really don't care for the city of Philadelphia, who should I root for?

S&P's Capital IQ ran the numbers to give fans -- and investors -- more reason to care. The research firm studied the correlation between historical stock market returns and the winner of the World Series. It used 73 years of World Series history (dating back to 1935) based on average annualized returns for the S&P 500.

First, the researchers found that when the series went to six games, the average stock market return the year following was 15%. If the Phillies can force a game seven and history proves correct, the average return goes down to 8% next year.

Historically, when the Yankees have won the World Series, the average stock market return the following year was 10% and following a Phillies loss the index returned 11%.

However, following a Phillies World Series victory (1980 and 2008), the index returned 6%. Going more macro, when the National league wins the World Series the average return is 15% compared to 9% for the American league.

Interestingly, the study went back to 1935, so it left off four of the Yankee's other World Series titles: 1923, 1927, 1928, and 1932. Adding those four years into the Yankees average, the market return improved to 13.65%.

The conclusion? If you want the best return for the stock market next year, you should be rooting for the Yankees tonight.

But even this compelling evidence isn't enough to get me to cheer for the Yankees. The World Series isn't for sale and the Yankees have tried to purchase it for the past 10 years. According to ESPN, the Yankees have by far the highest payroll in baseball at $209,081,579 -- over $71 million more than the next closest team. We know that conspicuous consumption doesn't work for the economy and it shouldn't work in baseball.

Maybe I'm just bitter that the Yankees knocked the Angels out, but I'll take my chances that a National league victory is better for the stock market then an America league victory.

Call me contrarian. Let's go Phillies.
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No positions in stocks mentioned.

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