It’s not just little leaguers who can learn a thing or two from Derek Jeter.
As the curtain goes down on the illustrious 20-year career of the New York Yankees shortstop, here are three lessons investors should remember as they navigate the turbulent stock market.
1. Don’t swing for the fences: Chicks dig the long ball, but Jeter’s career shows there’s more to baseball — and investing — than just hitting home runs.
The Yankee great is a sure bet to make the Hall of Fame despite the fact that he averaged just 13 home runs a year. In fact, Jeter had just one grand slam in his career.
But Jeter made a pretty solid living by hitting singles and doubles on a very consistent basis.
While it’s tough to be as consistent as Jeter, investors should try to mirror his career by avoiding the temptation of trying to find a grand slam stock.
Speculative stock picking can turn into a big win every now and then, but it can also really backfire.
For example, in late 2011 some courageous investors bought shares of RadioShack ( as it tumbled below $10, a rare event in its history. )
Unfortunately for those investors, RadioShack kept crumbling. Today it’s barely trading above $1, as the company fights off persistent bankruptcy talk.
Investors who played it safe by betting on the retail industry more broadly fared far better. The SP Retail ETF ( — which has never had to deal with a bankruptcy rumor — has surged 63% since late 2011. Not bad for playing it safe. )
2. Don’t panic in the fall: Late September and October can be a stressful time for baseball players and investors alike.
MLB players are dealing with the bright lights of the playoffs, where a single pitch can make or break 162 regular season games. Investors too are grappling with a historically turbulent period that has in the past featured the collapse of Lehman Brothers and the Black Monday crash of 1987.
Jeter thrived under the pressure of the fall, winning five World Series championships and the nickname of “Mr. November” for his stellar performance in the 9/11-extended 2001 postseason.
He succeeded in part by not panicking. That’s something investors should remember during times of turbulence — in the fall or otherwise.
Staying calm would be wise during the current market turbulence, which caused the Dow to plummet 264 points on Thursday amid a selloff led by the tech sector.
More turbulence could be ahead this week as investors get their hands on a wave of economic data, highlighted by key manufacturing numbers and the September jobs report.
Stocks could be headed for a pullback or even their first correction since October 2011, but the SP 500 is barely 2% away from all-time highs. That’s hardly a panic-worthy drop.
3. Strike a balance: One of the things that made Jeter a great hitter is the fact that defenses and pitchers couldn’t rely on one tactic to consistently get him out.
If they pitched him inside, he was strong enough to pull the ball down the line. If they tried to get him out away, he’d drive the ball to the opposite field. That’s a much more balanced approach than many sluggers who have predictable swings, no matter how strong.
Investors should try to take a similarly balanced and diversified strategy.
Just because technology stocks like GoPro (, )Tesla ( and )Facebook (Tech30) might get all the hype, doesn’t mean they should make up your entire portfolio. ,
Likewise, investors need to balance out their U.S. stock market holdings with shares of funds that track overseas markets. They also need to have exposure to less the sexy, but more consistent performing, corporate and government bonds.