Investment experts have now revealed what has been the best trading strategy for the S&P 500 ETF (SPY). The popular exchange-traded fund allows the market to speculate in the stocks’ leading index and accumulates massive gains since 1993.
However, not all traders or investors had the same results, as some trading strategies have proven better than others.
In particular, The Kobeissi Letter posted a study on X showing how three core strategies performed over the years. The study, from Bespoke Investment Group, addresses buy-and-hold, intraday trades, and after-hours, with the first being the best strategy.
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Buying and holding SPY at its launch would have been the most profitable investment strategy, as it has risen by 1,138% over 30 years. Interestingly, swing trading in the after-market every day since 1993 has achieved a similar result of 992% gains. The least profitable strategy was doing intraday trades, rendering 13.3% over the same period.
S&P 500 (SPY) after hours vs. regular trading performance (%). Source: Bespoke Investment Group / The Kobeissi Letter
Best strategy: Trading the stock market after hours
Therefore, when we remove the buy-and-hold conservative investment strategy – resulting in the overall growth of the S&P 500 in the past 30 years – trading the ETF at the stock market after hours has proven to be the best trading strategy for market participants.
Essentially, this trading strategy considers buying the SPY daily close and selling the next day’s open. On the other hand, intraday trading – or day trading – would happen by buying the day’s open and selling at its close.
“This means that the vast majority of gains have occurred after market close and before market open. Companies’ earnings releases and subsequent conference calls almost always occur outside of regular trading hours and lead to material stock price movements. After-hours trading is more important than ever.”
– The Kobeissi Letter
However, the after-hours market is known for having lower liquidity and being dominated by institutional investors, adding considerable risks.
The S&P 500 (SPY) price analysis
As of this writing, the S&P 500 index ETF, SPY, is trading at $562.59, approaching the after-hours. Notably, the leading finance product is up 0.63% year-to-date, five days before the Federal Reserve’s meeting on September 18.
Most experts believe the Fed will decide favorably for the first interest rate cut in years, which may benefit stocks.
As Finbold reported, Chris Pulver is looking forward to this month’s meeting as a way to challenge the feared “September Effect” and the poor U.S. jobs data. At the same time, Meta AI, Llama 3.1, forecasts the dollar may suffer from the expected interest rate cut.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
