Investors can only hope stocks do as well in December as they did in November. There are definitely some S&P 500 stocks that glisten in the last month of the year.
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Nine S&P 500 stocks — including tech name Skyworks Solutions (SWKS), health care play Eli Lilly (LLY) and energy stock Baker Hughes (BKR) — beat the index in December in each of the past five years. Additionally, these stocks all gained 3% or more, on average, in the month.
And that's bullish as December already tends to be one of the best months of the year, says "Stock Trader's Almanac." "Wall Street's only 'free lunch' served before Christmas," the Almanac says.
How December Sizes Up For The S&P 500
How do stocks do in December? It has been the third-best month of the year going back to 1950, says "Stock Trader's Almanac." During the month, the S&P 500 gained an average of 1.5%.
But to be fair, December is somewhat of a wild card. And it's been disappointing lately, losing 0.8% on average in December the past five years. Last December, the S&P 500 dropped 5.9%. And it shed 9.2% in 2018, marking the worst December since 1931.
But stocks can also surprise to the upside during the month, too. The S&P 500 gained in 2019, 2020 and 2021 by 2.9%, 3.7% and 4.4%, respectively. But a little more than a handful of stocks do even better than that.
S&P 500 Stocks That Shine In December
When it comes to top performers in the month, Skyworks Solutions stands out. The designer of semiconductors not only topped the S&P 500 every month of December, it gained an average of 8.3% during the month in the past five years. Yes, it fell 7.9% in 2018. But it more than made up for it by rising 23% in 2019.
Investors need to look past a couple of rough years fundamentally, though, if they buy now. The company's adjusted profit per share is seen dropping 26% this fiscal year ended in January 2024 and falling an additional 6.7% in the fiscal year ended in January 2025.
Eli Lilly, the red-hot developer of weight-loss and neurological treatments, also does especially well in December. The stock, already up 61% this year, gained an average of 7.2% in the month of December. And last year shares fell only 1.4%, a drop in the bucket compared with big double-digit percentage jumps in 2019, 2020 and 2021.
Eli Lilly's bottom line is poised to explode next year. Analysts think the company will make $12.31 a share in 2024, up 85% from 2023.
Looks like there's plenty for investors to look forward to in December.
Top-Performing S&P 500 Stocks In December
All topped index in past five Decembers
| Company | Ticker | Avg. change in Dec. |
|---|
| Skyworks Solutions | (SWKS) | 8.3% |
| Eli Lilly | (LLY) | 7.2% |
| Baker Hughes | (BKR) | 7.2% |
| Nike | (NKE) | 5.4% |
| Las Vegas Sands | (LVS) | 4.9% |
| Teleflex | (TFX) | 4.2% |
| AES | (AES) | 3.6% |
| Estee Lauder | (EL) | 3.3% |
| Bunge Global | (BG) | 3.2% |
Sources: S&P Global Market Intelligence, IBD
FAQs
“Most research suggests the right number of stocks to hold in a diversified portfolio is 25 to 30 companies,” adds Jonathan Thomas, private wealth advisor at LVW Advisors.
Is it better to sell stocks in December or January? ›
With tax-loss selling, the idea is that U.S. investors sell a lot of losing stocks in December to generate losses they can use to reduce their taxable income, and therefore lower their tax bills. That generates abnormal downward pressure on the market in December, subsiding in January, giving stocks a bit of a bounce.
What is the 10 am rule in stock trading? ›
Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.
What month is best to buy stocks? ›
Mondays and Fridays tend to be good days to trade stocks, while the middle of the week is less volatile. Historically, April, October, and November have been the best months to buy stocks, while September has shown the worst performance.
Is 10 stocks a good portfolio? ›
A portfolio of 10 or more stocks, particularly those across various sectors or industries, is much less risky than a portfolio of only two stocks.
How many stocks should you own in Warren Buffett? ›
This means that buying more than 12-20 stocks will not make your portfolio more immune from market volatility. Indeed, looking at portfolios of successful investors like Warren Buffett and other gurus, you see 8-15 stocks, which is the correct diversification.
Why do investors sell in December? ›
Some argue that at the end of each year, investors tend to sell off securities at a loss to offset their capital gains and lower their tax bills, prompting a sell-off. After the New Year, they repurchase the stocks, creating a greater demand for a range of shares in the market, leading to the January effect.
What are the worst months for the stock market? ›
NYSE Composite Seasonal Patterns
- Best Months: April, July, October, November, and December.
- Worst Months: January, February, June, August, September.
The December effect is similar in spirit to the January effect. Stocks that have done well in the January-November period are not sold by investors in December because selling those stocks will result in taxable capital gains.
Is owning 100 stocks too many? ›
It's a good idea to own a few dozen stocks to maintain a diversified portfolio. If you load up on too many stocks, you might struggle to keep tabs on all of them. Buying ETFs can be a good way to diversify without adding too much work for yourself.
On the one hand a diversified portfolio of stocks, say at least 15–20, reduces the company-specific risk and leaves you with a portfolio that will track major market averages.
How much stock does an average person own? ›
Average value of stocks held by American families
The median value of stocks held by American families in 2022 was $52,000. That's well above what it was in the early and mid-1990s but below the peak recorded in 2001.
Is 100 shares of stock a lot? ›
Buying and Selling
When you've settled on the stock you want to buy, it's time to make an order. Stocks are most commonly sold in round lots, or lots of 100 shares or more. A lot of less than 100 shares is called an odd lot; odd lot transactions generally have greater commission costs associated with them.
