Don’t let the S&P 500’s skid in December fool you. There was still lots of money to be made in stocks in the month and year.
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Beating The Market: How To Find Outperforming Stocks
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 Broadcom (AVGO) in December, you’d have $440,513 now, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
That’s an impressive 10-month gain of 4,305%. It’s quite a feat given the S&P 500 itself is up just a solid 25% so far this year. The same $10,000 invested in the S&P 500, though, would be worth just $12,494 now. That’s a gain of $2,494. The S&P 500 fell 1.2% in December, making it only the fourth down month this year.
Will The S&P 500 Get New Leaders In January 2025?
Hindsight is 20-20. And, clearly, few if any investors could have picked the top stock in each of the past 12 months, as it’s not a repeatable strategy.
But the staggering gains on S&P 500 stocks this year remind investors that amazing gains can be scooped up by diligent investors who stay engaged in the market. And Broadcom was a stellar example in December. The chipmaker’s shares surged 49% in just one month — making it the top S&P 500 stock in the month. It now carries a 96 RS Rating. And analysts think its profit will rise 30% in 2025.
Reading The S&P 500 So Far This Year
Monthly S&P 500 winners show how investors bobbed and weaved all year.
The AI rally dominated in January. And, no surprise, AI king Nvidia (NVDA) ruled with its 24.2% monthly rise. In 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 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 the month, while gold miner Newmont (NEM) took off 17.9%.
And 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 in June came the rally for Caesars Entertainment (CZR). In July, Mohawk Industries (MHK), a maker of building materials, jumped on hopes of homebuilding strength. And in August, packaged-food firm Kellanova (K) jumped 40.1% on a buyout offer from privately held candy maker Mars.
In September, the AI boom spread and lifted utility Vistra (VST) by 38.8%. Utilities are seeing huge demand for power to train AI models. Vistra’s stock is outperforming the S&P 500 this year. And then in October the boon in travel pushed United Airlines (UAL) up 38.2%. November’s champ was taser maker Axon Enterprise (AXON), up 52.8%, presumably on more demand during the Trump Administration.
What’s Coming Next For The S&P 500?
The big question, though, is: Will the S&P 500’s weakness in December bleed into 2025? Historically, January is a very unimpressive month, says “The Stock Trader’s Almanac.” December ranks No. 6 among months for S&P 500 returns going back to 1950, according to the traders’ tome. The S&P 500 rises 1.1% in January on average. And it rose about 70% of the time.
Looks like investors might have new uncertainties to look forward to soon.
How To Turn $10,000 Into $440,513 In 12 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 |
| September | Vistra | VST | 38.8% | Utilities | 2.0% | $100,868 | $140,004 |
| October | United Airlines | UAL | 38.2% | Industrials | -0.7% | $140,004 | $193,486 |
| November | Axon Enterprise | AXON | 52.8% | Industrials | 5.7% | $193,486 | $295,646 |
| December | Broadcom | AVGO | 49.0% | Information Technology | -1.2% | $295,646 | $440,513 |
