Most S&P 500 investors got a little gain this month. But investors willing to look off the beaten path found huge gains.
All told, had you invested $10,000 in January and reinvested your money into the top stock currently in the S&P 500 each month this year, including Abiomed in November, you'd have $261,421 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive 11-month gain of more than 2,514%. That's quite a feat in a year the S&P 500 is down more than 17% and has been brushing with a bear market all year. The same $10,000 invested in the S&P 500 would be worth just $8,290 now. That's a loss of $1,710.
Did November Kill The S&P 500 Bear?
Hindsight is 20-20. And clearly, few if any investors could have picked out the top stock in each of the past 10 months, as it's not a repeatable strategy. But the staggering numbers are a reminder to investors that gains can be found in a near bear market.
And November largely lived up to its reputation as a good month for the S&P 500. By gaining 2.1% during the month, that's actually slightly better than the S&P 500's 1.8% average gain in November going back to 1950, says "Stock Trader's Almanac."
A good November is a much-needed break for investors. This November is turning out to be the fourth best month of the year so far. Traditionally, November is the second-best month of the year, says "Stock Trader's Almanac."
But this year, the S&P 500's gain in November strings together the second-straight month of gains. It's the first time all year the S&P 500 rose two months in a row.
Top Stock Of November: Abiomed
Abiomed, a maker of devices to help patients' hearts pump, was the S&P 500 stock to own in October. Shares soared more than 49% during the month. What's a good way to make a quick profit this year? Get a buyout offer.
Johnson & Johnson offered to buy Abiomed for $16.6 billion in November. That unexpected news sent the stock flying. But the company was giving investors reason to stick around even before the buyout offer. The company on Nov. 1 reported adjusted profit per share that was 26% higher than expected. The company earned $1.30 a share, which was also up more than 26% from the same period a year ago.
But Abiomed is far from the only S&P 500 stock to light it up in November. More than three-quarters of the stocks in the index rose during the month. And a handful, in addition to Abiomed, jumped more than 25% just in November. Those include Etsy, SolarEdge Technologies and Wynn Resorts.
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 Halliburton into January's best stock with its 34% jump. And energy has been a favored sector all year, including big rallies of EQT in both March and April.
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 its 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 at Biogen (BIIB) to escape the market's downward pull. Health care created the top winner in October, too.
Here's to hoping December can build on the S&P 500's solid showings in October and November. December is traditionally the third-best month of the year, says "Stock Trader's Almanac."
Will the Santa Claus rally still show up after a string of good months?
How To Turn $10,000 Into $261,421 In 11 Months
| 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 | 34.4% | Energy | -5.3% | $10,000 | $13,440 | |
| February | SolarEdge | 34.1 | Information Technology | -3.1% | $13,440 | $18,023 | |
| March | EQT | 48.7 | Energy | 3.6% | $18,023 | $26,800 | |
| April | EQT | 18.0 | Energy | -5.4% | $26,800 | $31,624 | |
| May | Albemarle | 33.4 | Materials | -5.3% | $31,624 | $42,187 | |
| June | Dollar General | 11.4 | Consumer Discretionary | -8.4% | $42,187 | $46,996 | |
| July | Enphase Energy | 45.6 | Information Technology | 9.1% | $46,996 | $68,426 | |
| August | Constellation Energy | 23.4 | Utilities | -3.5% | $68,426 | $84,438 | |
| September | Biogen | 36.6 | Health Care | -9.3% | $84,438 | $115,342 | |
| October | DexCom | 51.3 | Health Care | 8.1% | $115,342 | $174,513 | |
| November | Abiomed | 49.8 | Health Care | 2.1% | $174,513 | $261,421 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
