Summary
Back in May, I wrote an article on State Street warning investors about how far the stock could fall in the event of a downturn.
In that article, I suggested rotating out of State Street and into a more defensive position, namely, Invesco S&P 500 Equal Weight ETF.
Since that article, State Street has fallen about 25%, and a large spread has opened up between the defensive ETF and State Street stock.
I noted in the original article that State Street would become a buy if it fell to $74 per share. It has done so, and I am now long the stock.
This article outlines the general strategy I am taking regarding State Street stock, and examines historical returns one would have gotten if they bought under similar circumstances in the past.
Introduction
On May 18th, I wrote an article titled "How Far Could State Street Fall? (And When I'll Start Buying)." In that article, I suggested that current State Street (STT) shareholders should consider rotating out of the stock and into a more defensive investment like Invesco S&P 500 Equal Weight ETF (RSP) because there was an above-average chance that State Street could fall much lower. Here is how the two investments have done since:
