The S&P 500 is off to a rough start in September. But it's not too late to reminisce about August's solid showing.
If you invested $10,000 in January in the top-performing stock in the S&P 500 at the time and reinvested that in each month's top performer, including cereal maker Kellanova in August, you'd have $100,868 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
That's an impressive seven-month gain of 908%. It's quite a feat given the S&P 500 itself is up a solid 18.4% so far this year. The same $10,000 invested in the S&P 500, though, would be worth just $11,840 now. That's a gain of just $1,840. The S&P 500 rose 3.9% in August, lifting it for the sixth month this year.
Will The S&P 500 Get New Leaders In August 2024?
Hindsight is 20-20. And, clearly, few if any investors could have picked the top stock in each of the past eight months, as it's not a repeatable strategy.
But the staggering gains on S&P 500 stocks this year remind investors amazing gains can be scooped up by diligent investors who stay engaged in the market.
In fact, even in a month the index fell, the S&P 500 offered many ways to make even more money. More than 70% of the stocks in the S&P 500 gained during August. And of those, seven stocks jumped more than 20% in just one month.
Top S&P 500 Stock Of August: Kellanova
The S&P 500 itself jumped in August. Many of the huge AI stocks that drove the market all year rebounded in the month. But you could have done even better with a low-tech bet.
Kellanova, a food processor formerly known as Kellogg's, saw its shares jump 40% in the month. And it's due to a buyout offer for Kellanova by Mars Inc. for $30 billion. Mars is best known for its line of candy, including M&Ms.
But even before the buyout, shares of Kellanova were perking up. Analysts think the company's profit will rise 15% this year. The stock sports a 76 EPS Rating and 95 RS Rating.
Reading The S&P 500 So Far This Year
Monthly S&P 500 winners show how investors ducked and weaved all year.
The AI rally dominated in January. And of course, AI king Nvidia (NVDA) ruled with a 24.2% monthly rise. February the whole S&P 500 jumped 5.2%, its best monthly gain this year so far. And that month the AI-fueling utility Constellation Energy (CEG) won with a 38.6% rise.
And then in March, the semiconductors lit it up. Micron Technology (MU) jumped 30.1%. And then investors pulled back in April due to worries about inflation. The S&P 500 dropped 2.6% in April, while gold miner Newmont (NEM) took off 17.9%.
And then in May, solar-power player First Solar (FSLR) rallied. It's a reflection of investors' appreciation that alternative energy will likely play a larger role in keeping power-hungry AI models running. And then June came the Caesars Entertainment (CZR) rally. In July Mohawk Industries, a maker of building materials, jumped on hopes of homebuilding strength.
What's Coming Next For The S&P 500?
The big question, though, is: Will the S&P 500's power in August flow into September? Historically, investors famously like to sell in May and go away until November.
And September is usually pretty lousy for stocks. It's the worst month for the S&P 500 going back to 1950, says the "Stock Trader's Almanac." The S&P 500 falls 0.7% in September on average. And it fell about 55% of the time.
So keep those big July gains in mind. You may really miss them in September.
How To Turn $10,000 Into $100,868 In 8 Months
| Month | Top S&P 500 stock | Symbol | Monthly gain | Sector | S&P 500 monthly ch. | Starting balance | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|---|
| January | Nvidia | NVDA | 24.2% | Information Technology | 1.6% | $10,000 | $12,420 |
| February | Constellation Energy | CEG | 38.6% | Utilities | 5.2% | $12,420 | $17,214 |
| March | Micron Technology | MU | 30.1% | Information Technology | 3.1% | $17,214 | $22,397 |
| April | Newmont | NEM | 17.9% | Materials | -2.6% | $22,397 | $26,406 |
| May | First Solar | FSLR | 53.1% | Information Technology | 2.3% | $26,406 | $40,427 |
| June | Caesars Entertainment | CZR | 24.8% | Consumer Discretionary | 4.3% | $40,427 | $50,453 |
| July | Mohawk Industries | MHK | 42.7% | Consumer Discretionary | -0.4% | $50,453 | $71,997 |
| August | Kellanova | K | 40.1% | Consumer Staples | 3.9% | $71,997 | $100,868 |
