October 2021 Recap
Written By: Dan Moylan, Chief Investment Officer
Well, U.S. stock markets did what was expected in October and pushed higher to take back the September losses. The 100-day moving average of closes (SMA) held after getting hit hard the end of Q3 as discussed last month and now October saw fresh record closes. The October price action regained the uptrend in the S&P, DOW and the NASDAQ, all three logged gains for the month of 5.7%, 4.35% and 6.4% respectively. Not bad given all the negative news we have. There are still the same headwinds from China, inflation, interest rate fears and politics. Washington continues to hold back the economic recovery with a group of representatives holding hostage the bipartisan infrastructure bill, that passed the Senate months ago, to leverage passing the bigger reconciliation bill. Maybe this month we can get some highways and bridge funding approved!
In October, we made a couple of model wide trades that changed the allocation a bit for most of you invested in the ROOF and HIGH VALUE models. The first trade swapped 20% of your holdings in Invesco NASDAQ Next Gen 100 ETF (QQQJ) and bought Sunpower Corp (SPWR) with the proceeds. This is a play on the movement toward green power, since SPWR is well established in solar solutions worldwide. I expect them to increase the top line substantially over the next few years and have shown the ability to grow profits as well. The other model wide trade was the swap of Humana (HUM) for the short term treasury SPTS. HUM hit our target price again and we let it run up a little over the 10% gain target. The realized gain from selling October 25th the shares from the August 11th buy was +13.16%. We will wait for HUM shares to come back to our buy target and swap SPTS to go long HUM again.
We are still bullish growth, with a bit of value mixed in for November. I know some of you have Quarterly Reviews scheduled in November, so that’s the time to discuss moving some money a little safer if you are anxious about this bull market.
I hope you had plenty of candy for the trick or treaters this year. Have a great November.
If you have any questions, please don’t hesitate to call us at 844-CARLSON (844-227-5766).
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