Still cheering the Baltimore Ravens' Super Bowl victory Sunday? Or maybe the applause has turned to the Federal Reserve for lowering interest rates again. They both may have given us all a lot to cheer about.

        Most valuable player Ray Lewis probably wasn't thinking about his portfolio when he broke up four New York passes and led a defense that held the Giants offense scoreless. But if historical superstition has anything to say about it, he and his team locked the stock market into a bullish year.

        It's called the Super Bowl Indicator: When an old National Football League team wins, the market advances. When an old American Football League team wins, the market declines.

        The Super Bowl Indicator has been successful in 27 of its 34 years — an accuracy rate of 79 percent.

        But here's the catch: Either the Ravens or the Giants would have assured a bullish year under this theory. While the Ravens now play in the American Football Conference (the descendant of the American Football League), the team traces its franchise roots to the Cleveland Browns — which did originally play in the National Football League.

        The Giants have always been an NFL, and now NFC, team.

        But remember: The St. Louis Rams — which played in the old NFL while in Los Angeles — won the 2000 Super Bowl. Major indexes still had one of their worst years in decades.

The January Effect

        The Super Bowl Indicator didn't work in 2000, but the year did prove the January Effect right. This one says that as goes January, so goes the year. January 2000 saw 3 percent to 5 percent dips in all major indexes.

        According to this one, 2001 does stand to be bullish. Major indexes were in the black for January — if only slightly.

        But the January Effect is often discounted as a predictor, viewed instead as a mathematical given. Eleven months of movement sometimes don't outweigh one.

        The January indicator has been right 28 of the last 34 years. Two of the times that the Dow has fallen — including 1990, when the Dow fell 5.9 percent in January and ended the year down 4.3 percent — the market rebounded, but not enough to fully recover and end the year up

The Greenspan Effect

        But this week, most investing eyes were on Alan Greenspan. His Federal Reserve Board lowered interest rates a half-point, much to Wall Street's pleasure.

        This one is 100 percent effective: In every single one of the last 22 interest-rate cuts, the Dow Jones Industrial Average has gained within the next year.

        In 14 of those — including the most recent seven — the games have been double-digit. The last six are above 20 percent.

        But those are long-term gains. The Dow Jones & Co. data show that the average makes negligible gains in the first month after an interest-rate cut. In eight of the last 22 cuts, the average actually has fallen.
       Amy Higgins writes about personal finance for the Enquirer. You can reach her at (513) 768-8373; ahiggins@enquirer.com; or Your Money, The Cincinnati Enquirer, 312 Elm St., Cincinnati, OH 45202.
       

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