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Here’s my amazing stat of the week. I ran test where the first day of each month I buy the S&P 500 and wait for the end of a month where the close is higher than my purchase price before selling. I only hold one position at a time. Obviously, 99% of the trades are profitable (since I won’t exit until it’s profitable). What’s interesting though, is to look at the periods where the holding time was the longest (ie the longest time the S&P 500 had between taking out a previous month’s open price.
Going back to 1963, the three longest holding times are 90 months, 79 months and 42 months. The 90 and 42 are both from the horrible bear market of the late 60’s and 70’s. The 79 month was from 10/2000 -> 5/2007. The S&P opened 10/2000 at ~1441, today it’s at 1326. 7.5 years and a loss of 5%+. It’s hard to find many periods of S&P performance worse than that.
- John