We love to talk passionately about “streaks.” It offers us a reference point back to another place or era. They fill our imaginations in a positive way, providing faith that sometimes the impossible, can in fact become possible. Streaks are often not as appreciated in the moment and time has a unique perspective on how valuable or insane the ride was.
Let us take a ride back in time for some all-time baseball streaks: Longest regular-season win streak—26 games, New York Giants, Sep 7-30, 1916. Most consecutive wins to open a regular season—13 (tie) Atlanta Braves, 1982, and Milwaukee Brewers, 1987. Most consecutive World Series championships—5, New York Yankees, 1949-1953. Consecutive games played—The Iron Man, Cal Ripken, Jr. 2,632. May 30, 1982-Sep 19, 1998; over 16 years without missing a game!! And for my money, the most hallowed sports streak of all; Joltin’ Joe DiMaggio’s 56 game hit streak. Born on May 15th, 1941 and stitched forever in our hearts ending July 17th, 1941. So, what gives with this streak talk?
The S&P 500 had its own monstrous streak during the past year and a half, which came to an ending. For 10 straight months it continued to hit dingers out of the park and produce positive returns. March 2017 was the last month the S&P 500 closed in the red (down) settling in at 2,362 points. Now here comes the impressive streak and W’s: April, May, June, July, August, September, October, November, December and continuing its torched pace into January 2018. A bulk of this performance took place in the backdrop of other current news events and may never get the respect or tipping of the cap it fully deserves.
I have a few thoughts on how this historic market streak got by us like a slow dribbler in the infield. The main event in 2017 was our Presidential election that captivated a nations emotion. We saw the rise and manic enthusiasm which swirled around Bitcoin and other cryptocurrencies. Volatility was nonexistent, and the bears hibernated. Another sneaky factor; we have been in a bull market since March 2009 (talk about streaks.) It is the second-longest on record without at least a 20% drop in the S&P 500. Expectations are funny and can end up in disappointment. The expectations now center around seeing our account statements go up in value. Stock market increases aren’t given a second glance and carry no concern for market idiosyncrasies or volatility. We must proceed with caution and respect because this is where the bulls and bears reside. At any rate, this “streak” went into the books on February 2018 at 2,713 points, tallying up an impressive 351-point score.
How does this streak rank in the pantheon of S&P 500 streaks? Academics, historians, and father time will be the judge. Here is a fun comparison. You would have to hop in the hot tub time machine and check into 1958 when the S&P 500 plowed through its historic 11-month domination.
February, like the state of Virginia, is for lovers. The Standard & Poor’s 500 index, a broad gauge of stocks, ended the month down -3.9% with multiple days of wild point swings. There was no love to be found for investors during the past month. At times, it felt cold as the ice you would find in the upper reaches of the Russian Siberia.
Can the markets engine of love be kick-started? I am optimistic for 2018: accelerating growth and productivity, increasing wages, low unemployment, strong business earnings, and a tailwind of corporate tax reform. However, as we intuitively and literally know, all great streaks do not last forever. No matter the weather, stocks do not just shoot straight to the moon in a linear line and trees do not grow forever into our cosmos. It would behoove you and your investment portfolios to be diversified and understand your own personal risk levels. We are going through a wonderful market volatility period to test this out…. Mr. Markets Streak was remarkable and historic.
Appreciating the “streaks” when they come,
Justin