“If today's close is higher or equal than yesterday's close, buy/hold SP500.”
1. You cannot buy based on today’s close price after you know today’s close price. Close price isn’t known even when the market closes, and may vary substantially from expected closing price after the closing price is published a few seconds to minutes after market closes. Orders for the closing auction are submitted all day, while the closing price is reported after the market closes. The closing price may vary substantially from what it was if you’d issued an order before the market closed. Also, there is a cutoff time for submitting closing orders.
2. Exchanges underwent many regulatory and technological revisions through time.
3. The volume has substantially shifted towards the closing auction through the years. From a few % to now almost 30% at close on NYSE, for example.
4. Almost all basic and published strategies stop working after being found or published, for obvious reasons.
And especially in the age of electronic markets and computers where everyone can backtest millions of strategies and start utilizing them on large scale immediately.
Now almost every month we read about hedge funds whose strategies have stopped working after many years of being successful, and put them (and each other) out of business.
So such basic strategy has absolutely no right to be still working.
