It’s a tough S&P 500 stock market to make money in. But some investors are still finding a way to do it.
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All in all, you would have invested $10,000 in January and reinvested your money in the top stock currently on the S&P 500 every month this year, inclusive biogenic (BIIB) in September you would now have $130,465, says 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 an achievement in a year when the S&P 500 is down more than 24% and has struggled in a bear market all year. The same $10,000 that was invested in the S&P 500 would now be worth just $7,520. That’s a loss of $2,480.
While these nine stocks gained the most, the S&P 500 struggled throughout the month. The S&P 500 fell 9.3% in September, known as the worst month of the year for stocks. This extends the index’s 3.5% loss in August. It also prolongs the pain of many index investors. And to date, the S&P 500 has fallen in seven of the last nine months.
A gain in the S&P 500 is possible during a bear market
Review is 20/20. And clearly, few, if any, could have picked the top stock over the past seven months because it’s not a repeatable strategy. But the staggering numbers are a reminder to investors that gains are found in a bear market.
Investors always expect turbulence in September. But this year they got even more than usual. September is the worst month of the year since 1950, says Stock Trader’s Almanac. The average S&P 500 loss for the month is 0.5%. So this year has been a lot worse than usual. September is just the final chapter in a brutal market this year.
“(Stocks) have seen their own market cap fall by nearly $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 in September: Biogen
What does it take to stand out at such a difficult time for the S&P 500? A breakthrough drug with solid test results to combat a disease that has plagued mankind for centuries.
Biogen shares are up more than 36% in September. Investors were excited about the company’s groundbreaking data for a promising treatment for Alzheimer’s disease. This is exactly the kind of breakthrough needed to open up new treatments for neurodegenerative diseases. Several false starts in this area had discouraged the brain research industry. Biogen’s move potentially opens up this largely wide-open field.
And that’s the kind of surprise the market needs to dodge the drag of inflation and rising interest rates. Biogen’s adjusted earnings per share are expected to fall more than 14% this year. A breakthrough could accelerate growth again.
It also put Biogen in a class of its own in the S&P 500 in September. No other S&P 500 stock has performed anywhere near as well. This month’s #2 stock was another healthcare play, Regeneron (REGN). But it was only up 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.
Read the S&P 500 this year
The twists and turns of each month show how difficult an S&P 500 is for investors.
The year sparked fears of inflation and turned energy firm Halliburton (HAL) into the best-performing stock of January, up more than 34%. And then hopes are fueled for government incentives for more alternative energy games SolarEdge (SEDG) into February’s top stock.
Speculation returned to the S&P 500 in July as the market finally staged a powerful 9.1% rally. This month play information technology Enphase Energy (ENPH) led the way, up 45.6%. But that rally ended quickly, followed by a 3.5% drop in August when the best-performing stock was a utility: constellation energy (CEG). And that brings us to September, when it took a medical breakthrough to break out of the market’s downward spiral.
Some are hoping that October, known as bear slayer month, will knock the S&P 500 out of its funk. But one thing’s for sure: S&P 500 investors will still find a way to take advantage.
How to turn $10,000 into $130,465 in 9 months
Top S&P 500 stock every month of the year so far
| Month | Top stock in the S&P 500 | symbol | Monthly % earnings of the stock | sector | S&P 500% monthly ch. | Request. bal. | Cumulative value of $10,000 investment in January, reinvested in top stocks 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% | Industry | 3.6% | $18,023 | $28,188 |
| April | (TWTR) | 26.9% | communication services | -5.4% | $28,188 | $35,771 | |
| Can | 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 | biogenic | (BIIB) | 36.6% | health care | -9.3% | $95,509 | $130,465 |
Sources: IBD, S&P Global Market Intelligence