Strange Market Fact of the Day

Never underestimate the power of momentum on Wall Street. Since 1950, every penny of gains in the S&P 500 has come on days following 0.64% up moves. That happens roughly once every five market days.
In other words, if you invested only on days following 0.64% up days, and sat in cash the other 81% of the time, you would have easily beaten the market.
Warning: I’m not advocating such a strategy. That’s your classic sinkhole of back-testing. I merely want to show you how trend sensitive Wall Street can be.

Posted by on February 5th, 2008 at 1:49 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.