March Madness is here, but before you fill out your bracket or invest in stocks, consider this: the annual NCAA Division I men’s college basketball tournament often coincides with lower-than-average stock market performance. Research suggests that major sports events can negatively impact the market.
This phenomenon was first identified in a 2007 study titled “Sports Sentiment and Stock Returns” published in the Journal of Finance. Since then, numerous studies have confirmed that during significant sporting events like March Madness, soccer matches, cricket, rugby, and basketball tournaments, stocks tend to underperform.
Given this trend, it’s recommended to exercise caution when investing until the tournament ends on April 6. By avoiding excessive stock trading or making impulsive decisions based on your team’s performance, you may be better off sitting out the markets during March Madness and waiting for more favorable investment opportunities.
Source: https://www.marketwatch.com/story/how-march-madness-basketball-could-bust-your-portfolio-bracket-6f91d3e9