On October 3rd, five shares of Eli Lilly & Company (LLY) were purchased for $320.69 totaling $1,603.45 in stock, and $295.80 in cash was left over for a grand total of $1,899.25. On November 1st, the shares were sold for $349.37 leaving a grand total of $2,042.60 in cash ($1,746.80 in stock proceeds plus the cash of $295.80). In August, I started with $2,005 so this trading strategy has returned 1.9 percent over the last three months. And LLY is no longer the top stock in the S&P 100 index.
For comparison, the S&P 500 exchange-traded index fund, SPY, returned negative 6.3 percent from August through October so the trading strategy continues to outperform the broader market.
While the market was down significantly in August and September, it rebounded in October. Many Wall Street pundits now believe the Federal Reserve may be close to pausing their interest rate hikes. Some think the Fed will raise interest rates this week and one more time after that before pausing. Interest rates tend to have an inverse relationship with most assets. Therefore, once interest rates stop going up, stocks are expected to rise.
The New Top Stock
Biotech company Gilead Sciences Inc. (GILD) is the new top stock. Twenty-five shares were purchased on Tuesday at $79.29. Check back on November 30th for an update.
