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No ‘feel good’ factor from World Cup for retail investors

Wednesday 16th July 2014

Evidence of a Since short-term economic boosts have been well-documented after successful World Cup campaigns, following England’s early exit in Brazil, it seems retail investors have little appetite to change their investment strategy, according to the latest Halifax Share Dealing Market Tracker.
Just 11% of retail investors say they’re seeking to take advantage of the ‘feel good’ factor coming from the World Cup. Only 2% said they’ve sought exposure to Brazilian or, more broadly, Latin American companies, with just 1% claiming they’ll look to gain exposure to companies based in Argentina and Germany who contested the final. 
Four out of the last six World Cups have been followed with an improvement in the rate of growth in consumer spending in those countries that reached the semi-finals, Halifax says. 
The largest of which came after US '94 when consumer spending grew by 10.7% in the year after the final, having grown by 8.6% in the year before. And, after France '98 spending grew by 1.7%. 
Interestingly, despite England going out in the group stages there is slightly more interest among investors seeking opportunities in the UK, with almost 8% of investors claiming they’re seeking returns from domestic companies who have historically seen more business during major sporting events – such as those firms who’s focus is on consumer & retail products (beverages, health, tobacco, etc), and consumer services (such as retailers, leisure, entertainment).  
Damian Stansfield, managing director of Halifax Share Dealing, said:"Since 1990 countries that have reached the semi-finals of a World Cup tend to see consumer spending grow in the year following the Finals, and the timing and extent of the improvement in the period after a successful World Cup suggests some of the increase may be due to the 'feel good' factor associated with national sporting success.” 
“However, consumer spending is mostly driven by important economic factors such as employment and earnings growth, and investors need to be comfortable that any investment is being made for the right reasons,” he added.

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