A stock trader who consistently beats the S&P 500 shares the ‘after-action review’ he uses to refine his investing strategy
Uncategorized
A stock trader who consistently beats the S&P 500 shares the ‘after-action review’ he uses to refine his investing strategy
09 mins
Full-time trader Erik Smolinski uses after-action reviews (AARs) to refine his strategy.
He shared his 19-slide AAR for the first half of 2026 with Business Insider.
He believes all investors can benefit from regular reviews to check returns, fees, and portfolio fit.
Erik Smolinski, a full-time trader, has outperformed the S&P 500 by a wide margin. From Jan. 1 through July 6, 2026, he said his account returned 33.44%, compared with 10.79% for the index. Over the trailing 12 months, he said it gained 57.01%, versus 21.49% for the S&P 500.
The exercise helps him assess what worked, what didn’t, and what needs to change.
“I have different strategies and profit mechanisms that are designed to do different things — some of them are fairly persistent, and some of them are not, which means some of them will make good money when they work, but then they won’t always work,” he told Business Insider in 2025. “You have to know when to stop doing those things and pivot to something else.”
Smolinski said he approaches full-time trading as a business: “And guess what big businesses do? They have quarterly earnings reports. What is that? That’s an AAR.”
He shared his 19-slide AAR for the first half of 2026, breaking down his performance, decision-making, and lessons from the period. Below are several of the slides — and what they reveal about his process.
He begins with a one-frame overview of the year.
Erik Smolinski
Smolinski said the regime analysis is the most interesting part of the deck. It divides the first half of 2026 and the opening days of July into five distinct market environments: a low-volatility grind, a roughly 9% geopolitical drawdown, a V-shaped recovery, a June pullback led by mega-cap stocks, and a more dispersed, lower-correlation rebound.
What stood out, he said, was how quickly the market moved from one environment to the next. The year packed “four to five very different regimes” into a compressed window.
For investors, the lesson is to remain calm as conditions change.
“Stay calm if things seem a bit more volatile,” he said. “Also, be careful if you’re basing decisions on longer-term trends that are in flux.”
Erik Smolinski
Slide No. 6 highlights a quieter but important shift: Market leadership was broadening beyond the handful of mega-cap companies that have dominated the major indexes.
The “‘Mag 7 drives everything’ regime is not in vogue right now,” Smolinski said. Instead, he was seeing broader performance differences both within large- and mega-cap stocks and across market-cap segments, with small caps doing particularly well.
“Mag 7” is shorthand for the Magnificent Seven: Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Tesla (TSLA), and Nvidia (NVDA).
Erik Smolinski
Slide No. 13 examines how quickly investors bought the first half’s only pullback of at least 3%.
After falling 9.1%, the S&P 500 recovered its losses in 11 trading days — three days faster than the median recovery time for comparable drawdowns from 2021 through 2025.
To Smolinski, the speed of the rebound suggested that the forces supporting the market had remained intact despite the volatility. The episode “broadly indicates that despite the short-term volatility, underlying market drivers are still in force and supported by broader positioning,” he said.
Still, he cautioned against drawing a sweeping conclusion from a single event. The data describe one rapid buying dip, not definitive proof that every future decline will reverse just as quickly.
Erik Smolinski
One of the biggest risks Smolinski is watching in the second half is a renewed rise in interest rates.
At the time he prepared the review, futures markets were pricing in the possibility of a Fed rate hike at the September meeting. Such a move could have “a pretty significant impact” on the broadening trend he identified earlier, he said, potentially curbing small-cap stocks’ momentum and partially restoring the relative leadership of mega-cap and technology companies.
Toward the end of the H1 review, Smolinski offers three scenarios for the second half.
Erik Smolinski
He closes the review by scrutinizing the analysis itself: where the data came from, how he tested his claims, and where the conclusions may be less reliable.
He built the review using freely available data, including market prices from the yfinance library, economic and interest-rate data from the Federal Reserve’s FRED database, and the Cboe SKEW Index as a gauge of tail risk.
Erik Smolinski
Smolinski believes that individual investors can benefit from a similar exercise. You don’t necessarily need to build a 19-slide deck, but start by scheduling a structured checkup, perhaps quarterly or at least annually, to ask whether your investments still align with your goals and risk tolerance.
A useful place to begin is performance.
“For the regular investor, a great thing to compare your performance against is SPY, QQQ, IWM, TLT, and GLD,” he said. “Compare the performance of your holdings against those five tickers and just ask yourself, ‘Am I cool with this? Do I think that I’m set up appropriately?’ And if so, great, you don’t have to do anything.”
An AAR may simply confirm that your portfolio is behaving as intended, but it can also expose excessive fees, persistent underperformance, or an investment that no longer serves its original purpose.
“You might find that the mutual fund you’re in is actually sucking the soul out of your account, causing higher costs and lower returns,” Smolinski said. “And you might make a change.”
If you enjoyed this story, be sure to follow Business Insider on Yahoo.
