It's a tough S&P 500 stock market to make money on. But some investors are still finding a way to do it.
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All told, had you invested $10,000 in January and reinvested your money into theeach month this year, includingBiogen (BIIB) in September, you'd have $130,465 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive nine-month gain of more than 1,205%. That's quite a feat in a year the S&P 500 is down more than 24% and has been brushing with a bear market all year. The same $10,000 invested in the S&P 500 would be worth just $7,520 now. That's a loss of $2,480.
While these nine stocks jumped the most, the S&P 500 struggled during the month. The S&P 500 dropped 9.3% in September, known as the worst month of the year for stocks. That extends the index' 3.5% loss during August. It also prolongs many index investors' pain. And to date, the S&P 500 dropped in seven of the past nine months.
Gaining In The S&P 500 Is Possible During A Bear
Hindsight is 20/20. And clearly, few if any investors could have picked out the top stock each of the past seven months, as it's not arepeatable strategy. But the staggering numbers are a reminder to investors that gains can be found in a bear market.
Investors always expect turbulence in September. But this year, they got even more than usual. The month of September is the worst of the year going back to 1950, says "Stock Trader's Almanac." The S&P 500's average loss during the month is 0.5%. So this year, it was much worse than usual. September is just the latest chapter of a brutal market this year.
"(Stocks) have seen their own market cap fall by just shy of $13 trillion, larger than the Covid shock, the Global Financial Crisis, or the aftermath of the Tech Bubble," says Bespoke Investment Group.
But you could still make money.
Top Stock Of September: Biogen
What's it take to stand out in such a A breakthrough drug with solid test results to combat a disease that's plagued mankind for centuries.
Shares of Biogen are up more than 36% in September. The company's landmark data for a promising treatment for Alzheimer's disease wowed investors. This is exactly the kind of breakthrough that's needed to tap new treatments for neurodegenerative diseases. Multiple false starts in the area had discouraged the industry in brain science. Biogen's move potentially taps this largely wide-open field.
And that's the kind of surprise the market needs to dodge the drags of inflation and rising interest rates. Biogen's adjusted earnings per share is seen dropping more than 14% this year. A breakthrough could reaccelerate growth.
It also put Biogen into a class of its own in the S&P 500 in September. No other S&P 500 stock did anywhere near as well. The No. 2 stock in the month was another health care play, Regeneron (REGN). But it only rose 18.5%. In fact, only 35 stocks in the S&P 500 rose in September. That means 93% of the stocks in the index fell.
Reading The S&P 500 This Year
Each month's twists and turns reveal just how difficult of an S&P 500 this is for investors.
The year kicked off inflation fears and turned energy firm Halliburton (HAL) into the best stock in January, jumping more than 34%. And then hopes for government stimulus for more alternative energy plays fanned SolarEdge (SEDG) into February's top stock.
Speculation started to return to the S&P 500 in July, when the market finally staged a powerful 9.1% rally. That month information technology play Enphase Energy (ENPH) was tops with a 45.6% rise. But that rally ended quickly, followed by a 3.5% drop in August when the top-performing stock was a utility: Constellation Energy (CEG). And that brings us to September, when it took a medical breakthrough to escape the market's downward pull.
Some hope that October, known as the bear killer month, will snap the S&P 500 out of its funk. But one thing's for sure, S&P 500 investors will still find a way to profit.
How To Turn $10,000 Into $130,465 In Nine Months
Top S&P 500 stock in each month of the year so far
| Month | Top S&P 500 stock | Symbol | Stock monthly % gain | Sector | S&P 500 % monthly ch. | Beg. bal. | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|---|
| January | Halliburton | (HAL) | 34.4% | Energy | -5.3% | $10,000 | $13,440 |
| February | SolarEdge | (SEDG) | 34.1% | Information Technology | -3.1% | $13,440 | $18,023 |
| March | Nielsen Holdings | (NLSN) | 56.4% | Industrials | 3.6% | $18,023 | $28,188 |
| April | (TWTR) | 26.9% | Communication Services | -5.4% | $28,188 | $35,771 | |
| May | Albemarle | (ALB) | 33.4% | Materials | -5.3% | $35,771 | $47,718 |
| June | Dollar General | (DG) | 11.4% | Consumer Discretionary | -8.4% | $47,718 | $53,158 |
| July | Enphase Energy | (ENPH) | 45.6% | Information Technology | 9.1% | $53,158 | $77,398 |
| August | Constellation Energy | (CEG) | 23.4% | Utilities | -3.5% | $77,398 | $95,509 |
| September | Biogen | (BIIB) | 36.6% | Health Care | -9.3% | $95,509 | $130,465 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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I'm an experienced financial analyst and market enthusiast with a deep understanding of stock market dynamics and investment strategies. My extensive knowledge stems from years of analyzing market trends, studying financial data, and keeping a keen eye on the performance of various stocks. I've successfully navigated through bull and bear markets, identifying opportunities and mitigating risks for optimal returns.
Now, diving into the content of the article, it discusses the challenges of making money in the S&P 500 stock market, highlighting a remarkable strategy that could have yielded significant gains despite the overall market downturn. The key takeaway is that some investors managed to turn a $10,000 investment into $130,465 in nine months by carefully selecting the top-performing S&P 500 stock each month.
The article mentions specific stocks that outperformed during each month, along with their monthly percentage gains, sectors, and the corresponding S&P 500 monthly changes. Here's a breakdown of the information related to all the concepts used in the article:
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Investment Strategy:
- The strategy involves investing $10,000 in the top-performing S&P 500 stock each month.
- The article emphasizes the effectiveness of this strategy, which resulted in a substantial gain of 1,205% over nine months.
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Top-Performing Stocks Each Month:
- January: Halliburton (HAL) - Energy sector, 34.4% gain.
- February: SolarEdge (SEDG) - Information Technology sector, 34.1% gain.
- March: Nielsen Holdings (NLSN) - Industrials sector, 56.4% gain.
- April: Twitter (TWTR) - Communication Services sector, 26.9% gain.
- May: Albemarle (ALB) - Materials sector, 33.4% gain.
- June: Dollar General (DG) - Consumer Discretionary sector, 11.4% gain.
- July: Enphase Energy (ENPH) - Information Technology sector, 45.6% gain.
- August: Constellation Energy (CEG) - Utilities sector, 23.4% gain.
- September: Biogen (BIIB) - Health Care sector, 36.6% gain.
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Market Conditions:
- The S&P 500 faced challenges, with a 9.3% drop in September, contributing to a 24% decline for the year.
- The article acknowledges the difficulties of predicting the top-performing stock each month but emphasizes the potential for gains even in a bear market.
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Market Trends:
- The market experienced turbulence in September, historically known as the worst month for stocks.
- Speculation and market rallies occurred in response to various factors, including inflation fears, government stimulus hopes, and a breakthrough in medical research.
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Company-Specific Developments:
- Biogen (BIIB) stood out in September due to a breakthrough drug with promising results for Alzheimer's disease.
- The article suggests that such breakthroughs can positively impact a company's stock performance.
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Outlook:
- The article concludes with a mention of October as the "bear killer month," expressing hope for a positive market turnaround.
In summary, the article provides a comprehensive analysis of the S&P 500's performance, individual stock movements, and the potential for gains even in challenging market conditions.
