It’s been quite a year of contrasts for investors. Own the wrong S&P 500 stocks and you lose billions, but huge gains were there for the taking, too.
Nine of the top 10 S&P 500 stocks in December, like health care Alexion Pharmaceuticals (ALXN), plus a raft of consumer discretionary plays like Tesla (TSLA) and Ralph Lauren (RL), jumped more than 20% in the month, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That’s twice what the S&P 500 usually returns in an entire year.
And all told, had you invested $10,000 in January and reinvested your money into the top stocks currently in the S&P 500 each month this year, including in December, you’d have $1.7 million.
Hindsight is 20/20. And clearly, few if any investors could have pulled this off as it’s not a repeatable strategy. But the staggering numbers are a reminder to investors big gains are possible even in volatile years if you focus on leaders. Meanwhile, had you put $10,000 in the S&P 500, you’d have just $11,630. The S&P 500, lifted recently by value stocks and sectors, is up 16.3% this year.
Solid December For S&P 500 Stocks
The S&P 500 showed in December it could follow up an amazing November with even more gains. The SPDR S&P 500 Trust ETF (SPY) jumped 3.7% in December. That’s a solid showing if you consider it rose 10.8% already in November.
Health care is clearly still top of mind with many S&P 500 investors. Alexion Pharmaceuticals was among the index’s top performer during December. Shares of the developer of blood and enzyme treatments jumped 28%, just in December. The company’s profit is on pace to jump 15% in 2020, analysts say.
But in an important shift in the month, technology’s role changed. The Technology Select Sector SPDR ETF (XLK) jumped 5.3% during December. That’s the top S&P 500 sector of the 11. But when it comes to the top individual performers in the month, other sectors popped up just as often.
Industrial measurement firm Nielsen (NLSN) turned in the top performance in December, up 29.1%. And some consumer discretionary stocks were big winners. It’s almost like investors are getting ahead of a potential consumer spending spree next year. In the sector, Tesla, Ralph Lauren and PVH (PVH) all jumped more than 18% during the month.
Top S&P 500 Stocks In December 2020
|Company||Ticker||Dec. Stock % Ch.||Sector|
|Alexion Pharmaceuticals||(ALXN)||28.0%||Health Care|
|Walt Disney||(DIS)||22.4%||Communication Services|
|Ralph Lauren||(RL)||21.0%||Consumer Discretionary|
|Discover Financial Services||(DFS)||18.9%||Financials|
Sources: IBD, S&P Global Market Intelligence
Don’t Discount The Tesla S&P 500 Factor
You don’t want to belittle how important Tesla is now to the S&P 500. The electric-car maker’s stock was added to the S&P 500 this month. And among the current S&P 500 members, it’s a standout. Tesla is also a member of IBD’s Leaderboard.
Among current S&P 500 members, Tesla was the top performer in January with a 55.5% gain and also in August with a 74.1% rise. Investors are bullish on the company’s prospects. Tesla is expected to earn an adjusted $2.41 a share in 2020, up from just four cents a share in 2019. Do you know what to look at before buying Tesla stock now?
2020 Lessons For The New Year; Five Huge 2020 Winners With News Due
Top S&P 500 Stock Each Month Tell 2020’s Story
Looking at the top S&P 500 stocks this month shows how investors’ mood shifted in a tumultuous year. Health care issues heated up in February, making Regeneron (REGN) the month’s top stock. And then, it was the work-from-home world, with Citrix Systems (CTXS) taking the top crown in March.
Energy stocks started to bounce back in April, but also in November. And investors keep looking for a recovery, making consumer discretionary stocks the No. 1 in June, July, August, September and October.
But above all, 2020 is a year that shows that making money is possible if you know where to look — even during a pandemic.
Top Current S&P 500 Stocks Each Month In 2020
|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 Top Stock Each Month||Composite Rating|
|February||Regeneron Pharmaceuticals||REGN||31.6%||Health Care||-8.4%||$15,550||$20,464||67|
|March||Citrix Systems||CTXS||36.9%||Information Technology||-12.5%||$20,464||$28,015||47|
|June||The Gap||GPS||41.8%||Consumer Discretionary||1.8%||$115,713||$164,081||47|
|July||L Brands||LB||63.1%||Consumer Discretionary||5.5%||$164,081||$267,616||81|
|September||Darden Restaurants||DRI||16.2%||Consumer Discretionary||-3.9%||$465,920||$541,399||50|