Dividend Investor Backtests Investing $1,000 Annually In S&P 500 Based On Key Prices: Why They Suggest You 'Avoid Timing The Market'
Portfolio Pulse from Chris Katje
A social media account, Dividend Growth Investor, shared a backtest comparing the outcomes of investing $1,000 annually in the SPDR S&P 500 ETF Trust (SPY) from 1993 to 2023 based on different timing strategies. The study aimed to demonstrate the impact of market timing on investment returns. Results showed that investing at the lowest price each year yielded the highest return, but the difference between strategies was not significant, suggesting that timing the market is less important than consistent, long-term investment.
April 09, 2024 | 9:49 pm
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The SPDR S&P 500 ETF Trust (SPY) was highlighted in a backtest study showing the effects of different investment timing strategies over 30 years. The study suggests that long-term, consistent investment in SPY could be more beneficial than attempting to time the market.
The backtest results indicate that regardless of the timing strategy used, consistent investment in SPY over a long period leads to substantial returns. This could increase investor confidence in SPY as a long-term investment vehicle, potentially leading to increased demand and a positive impact on its price in the short term.
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