The World Cup is also a chance to score in the markets
5 min
At the start of summer, a record 48 teams headed to the Americas with dreams of lifting the football World Cup trophy. Billions of viewers tune in to the same spectacle, while FIFA studies point to billions in extra revenue and hundreds of thousands of jobs created.
But a closer look reveals a familiar pattern: a temporary demand surge, fuelled by years of investment, followed by the question of whether stadiums, public transport lines, and other infrastructure will remain profitable after the final whistle. Historically, post-tournament macroeconomic activity often cools after the initial boom, though this may apply less to the current host nations. Still, the debate over the World Cup’s true economic impact persists.
Lower returns
While the world’s top nations compete on the pitch, another contest plays out in the markets. June and July typically see reduced trading volumes—the usual summer lull. But during a World Cup, a systematic decline in returns comes into play. Researcher Yosef Bonaparte observed that in the US, average returns during World Cup months underperform comparable non-tournament periods by nearly 380 basis points.
Further studies show weaker intraday trading volumes during matches, delayed price reactions to news, and undervalued IPOs when launched mid-tournament. The cause? Not a sudden cash-flow shortfall, but simply that a large portion of investors are, quite literally, focused on something else.
Emotion, attention and the lure of the game
The drivers behind this are surprisingly human.
- First, there is emotion – victory sparks shared euphoria while defeat brings collective disappointment, two opposing forces that directly influence risk tolerance.
- Then comes attention – hours spent watching matches shift focus away from quarterly reports to penalty shootouts.
- Finally, there is the lure of the game – those who take bigger risks in sports betting are also more likely to chase volatile, lottery-style stocks whose appeal rests on speculative excitement rather than strong fundamentals.
The outcome? Markets trading below fair value. Not because valuation models break down, but because investors temporarily stop using them.
Scoring opportunities in the markets
With a touch of irony, the World Cup also brims with opportunities. Those who look away from the pitch during the tournament can seize significant wins on another field: the markets. The strategy? Focus on overlooked stocks, sectoral shifts, or IPOs. In a world where football dominates media attention, price formation can sometimes shift enough to create compelling mispricings.