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Buying The Dip

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Tech-heavy S&P 500 sees major comeback in 2023, but Big Tech's rally hits a speed bump.
finance2 years ago

Tech-heavy S&P 500 sees major comeback in 2023, but Big Tech's rally hits a speed bump.

Buying the dip, a short-term trading strategy of buying stocks the day after a selloff, is making a major comeback in 2023 with average one-day returns for the S&P 500 climbing to nearly 0.3%. This strategy is on track for its third-best average return ever for a calendar year, and its strongest since 2020. The strategy broke down in 2022 as investors endured wild swings as stocks moved steadily lower. However, several factors have helped the strategy regain some of its lost luster, including the successful debt ceiling extension, the AI boom, and relatively low equity exposure.