This is a follow-up to my last post, Tim’s Adjusted Strategy: Month 1. June 1st was the first trading day for that month so I bought six shares of Capital One Financial Corp. (ticker: COF), the top performing stock of the S&P 100 over the previous six months from December 2020 through May 2021. I bought the shares at $166.24 each for a total investment of $997.46 and held $29.93 in cash. This totaled $1,027.39 which was the amount of the proceeds left from the sale of the stock I held in May (month 1), Wells Fargo & Company.
With the end of June, it was time to close out the position and identify the new top performing S&P 100 stock. This past Wednesday, June 30th, was the last trading day of the month but I actually sold the COF shares yesterday morning on Thursday, July 1st, for $156.63 each. The proceeds totaled $939.81 yielding a total loss of $57.65 and a return of negative 5.6 percent. That was a bad return for one month. COF underperformed the benchmark S&P 500 SPY exchange traded fund (ETF) which returned 1.9 percent during the month of June.
Over the first two months, this modified strategy is down 3.2 percent and underperforming against the benchmark S&P 500 ETF (SPY) which is up 2.6% over May and June.
Why did COF go down? June was a bad month for bank stocks as interest rates declined. From May 28th through June 30th, the yield on the benchmark 10-year treasury note declined from 1.58% to 1.44%. Lower interest rates means less income for lenders like Capital One Financial Corporation.
The Newest Top Stock
The new top performing stock for the last six months is now the Ford Motor Company (F).
Yesterday, July 1st, I purchased 64 shares of Ford for $14.92 each, totaling $954.84. I will hold the remainder of $14.90 in cash (=$969.74-$954.84). For this month of July 2021, Tim’s adjusted strategy creates a portfolio weighted 98.5% in Ford stock and 0.5% in cash. Obviously, this portfolio is very, very heavily weighted on the newest top performing S&P 100 stock.
I will you keep you posted on how COF performs in June. So make sure to check back in 28 days.