Triple Crown Win Is Bad News For Stocks




Over the weekend American Pharoah won the Triple Crown, after 37 long years, finally we have a true champion.

For those we do not know what that means, 1 horse has to win all 3 of the big races in a single year: Kentucky Derby, Preakness, and the Belmont Stakes. Clearly one of the hardest things to accomplish in all of sports, there is a champion crowned every year in all other sports, but this type of honor is special.

One problem with this win, this could mean bad news for stocks!

Dave Lutz who works at JonesTrading, said that out of the 10 years there has been a Triple Crown winner only one time has there been a positive return on the year.

Not only 90% of the time there is a loss on the year, on average the decline was 9%, that is very substantial for anyone who has money in the market.

“Since 1928 (when S&P data begins), there have been ten Triple Crown winners. Following those ten victories, the average change of the S&P 500 for the rest of the year was a decline of 9.01% with positive returns only once (Omaha). On the other hand, looking at the S&P’s performance in all years since 1928 where there was not a Triple Crown winner, the index has averaged a gain of more than 5% with positive returns more than 75% of the time.” said Lutz.



Apparently many investors are actually nervous, and while some may not look too deeply into these statistics, it should still be talked about now, so we can of course say “told ya so” down the road.



What Do You Think?