As the world’s most popular sport, football is often a pillar of national identity and a source of collective pride. That is why the Fifa World Cup can trigger intense emotions in a way that no other sporting mega-event can. This year’s tournament in Qatar is no different.identified a significant decline in France’s suicide rate during the month-long tournament and a dramatic 19.9% decrease in the days following the French team’s matches.
Similarly, several studies have found that international football tournaments can significantly affect markets. A 2016 study found that the Italian team’s performance has influencedNational-level sporting victories, the authors concluded, can produce a sense of euphoria among investors. Losses, on the other hand, tend to depress investors, particularly non-institutional retail investors.
According to the authors, these findings confirm that psychological factors drive much economic activity. The primary proponent of this view was British economist John Maynard Keynes, who famouslyof mob behaviour, noting that “it may often profit the wisest to anticipate mob psychology rather than the real trend of events, and to ape unreason”.
Given this trend, shrewd investors may want to decrease their US equity exposure during the Fifa World Cup period. But if many investors adopt this strategy and reduce their exposure to US stocks simultaneously, a market decline could become a self-fulfilling prophecy.