It’s an exciting time for us Pittsburgh Pirates fans as we just clinched a play-off spot. Usually around this time of year, we’ve forgotten our Pirates and moved onto our Steelers. This has been a special year. A year that we will have a winning season for the first time in 21 years. And not just a winning season, but a trip to the play-offs (the first time since 1992) and possibly, the World Series! Yes, the World Series!!

Back in the start of the season, most folks wouldn’t have imagined the Pirates a contender for winning the National League, or even making the play-offs. The best to hope for was more wins than loses. That was the hope, but many figured that a losing season was sure to come, making it another disappointing year.

Expectations

[pullquote style=”left” quote=”dark”]…what went from a goal of “just have your best season in 21 years” to “they better be playing in October”.[/pullquote] However, among us Pirate fans, something interesting is happening. We’re no longer satisfied with just a winning season, nor a trip to the play-offs. We’re not even happy with a 1 game play-off. Quite frankly, what went from a goal of “just have your best season in 21 years” to “they better be playing in October”.

So what happened? Expectations changed! And rightfully so. The fans know that the Pirates are a better team than those previous 21 years. The fans know that this team is capable of winning a championship. The fans know the Pirates can achieve these expectations. But shouldn’t we be happy knowing that the team is surpassing everyone’s expectations?

Expectations in the Financial Markets

The same is happening in the investment world. Our expectations for 2013 was to see high single digit returns in the stock market and low single digit returns in the bond market (LPL 2013 Outlook). However, things turned out better than expectations. The S&P 500 has a year to date as of 9/26/13 of 18.89%

Are You Content?

A pullback is always possible, but let’s imagine a pullback in the last quarter. A pullback of 10% will bring the 2013 return to those high single digit returns. Will investors be satisfied? Content? Imagine an account value on 1/1/13 of $100,000 growing to about $119,020 on 9/24, but finishing out the year at $109,000.

Would the investor be content to have a return of 9% for the year? Or upset over the short term pullback of 10%?

Sure, I would have been satisfied with just a winning season, but things changed now. Let’s go Buc’s! And no pullbacks, please.