“(MoneyWatch) Call your broker, go online, but however you do it, buy stocks today! Why? Because two of the most famous predictors of stock market performance both point toward buying stocks now.
Super Bowl indicator
One of the best known market indicators is that stocks skyrocket if the Super Bowl winner was once part of the old National Football League. Even though the big game isn’t until February 3, I’m going to go out on a limb and predict this will happen. That’s because both the Baltimore Ravens and San Francisco 49ers were members of the old National Football League.
According to Snopes.com, the indicator has correctly predicted the stock market about 80% of the time. That’s a pretty good track record and I admit I’d increase my allocation to stocks if I knew the market had an 80% chance for an up year. But I want more!
January Barometer
Stock market forecasters on Wall Street place a great deal of emphasis on stock performance in the month of January, as it is perceived as setting the pace for stock performance for the rest of the year.
So if stocks surge in the month of January, it apparently increases the odds that the market will be up at the end of the year. This phenomenon is termed the January Barometer by Stock Trader’s Almanac, and sports a pretty impressive accuracy rate of almost 90%.
While January isn’t over yet, the odds of a favorable barometric reading are pretty darn good. The S&P 500 index is up 4.8% through January 24.
If I put both of these so-called powerful predictors together, the math indicates that there is only a 2 percent chance of a declining stock market in 2013. That translates to a 98 percent probability of an up stock market. You’ve got to like those odds!
Back to reality
Before jumping into stocks, however, let’s go over a little lesson on statistics….”
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