Erik Smolinski is fascinated by markets.
“I watch them all the time,” the 33-year-old investor told Business Insider.
Since he started trading as a teen in 2007, he’s only posted two negative years: his first two years. Between 2018 and 2022, he returned 24.6% on average, which BI verified by looking at screenshots of his summary statements. The S&P 500 index averaged nearly 12% over the same period.
His strongest year was 2023 when his return on invested capital was 243%. “The actual total return on the account for 2023 was 118%,” noted Smolinski, who attributes the triple-digit return to finding “distinct arbitrage opportunities.”
Active trading isn’t for everyone, and experts agree that the everyday investor looking to build long-term wealth should stick with a less risky passive investing strategy.
Smolinski, however, prefers the active approach. The financially independent Marine vet has time to study the market — and is genuinely curious. He uses resources like thinkorswim, Financial Juice, Benzinga, and Barchart.com.
“But most of the research I’m doing is done through my own dataset,” said Smolinski, who procures stock market data from Cboe and queries it in Python. “I essentially create a data stack that I can test ideas with.”
How he’s investing in 2024: Betting on small caps
According to Smolinski, “We’re in a market scenario that has the potential to provide life-changing, generational wealth.”
The way he sees it, the Fed is eventually going to pivot to cutting rates after hiking them aggressively in recent years and then keeping them high to fight inflation. That would be great for small-cap stocks, which are conventionally more desirable when rates fall because they are more sensitive to domestic borrowing costs and consumer spending.
“I would bet dollars to donuts, small caps are going to skyrocket,”
