The Stock Market Equivalent of the Cal Ripken Streak

For more than 16 years, Cal Ripken suited up for a record 2,632 consecutive games. I find it challenging to watch nine innings, he was on the field for 24,000 of them. This streak will never be broken, ever. A similarly amazing streak occurred in the stock market in the nineties, which has the potential to remain on top for a long, long time.

From October 1989 through the summer of 1998, there wasn’t a single week where the S&P 500 fell more than 5%. Over this nine-year period, the S&P 500 compounded at nearly 17% a year, for a 290% total return.

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This streak of tranquility lasted 462 weeks, and ended with a bang. As the saying goes, stability leads to instability. In the summer of 1998 the streak was snapped and the S&P 500 experienced back-to-back down 5% weeks for the first time since…October 1987.

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The last time we had a really bad week was January 2016, and here is what was reported in that weekend’s New York Times- “A wave of late selling pummeled United States stocks on Friday and pushed the market to its worst week in four years.”

You hear a lot about the worst days, but not enough about the worst weeks. Bad days come and go, but it’s the bad weeks that lead to fear. Fear leads to the newspaper. The newspaper leads to your portfolio. Your portfolio leads to suffering.

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