Lessons from the Best Performing S&P 500 Stocks

  • (0:45) – Best Performing Stocks In The S&P 500
  • (5:40) – Lessons To Help Build Wealth
  • (17:30) –  Tech Giants and Other Surprise Stocks That Made The List
  • (26:20) – Big Takeaways From These Top Performers
  • (32:00) – Episode Roundup: MNST, GE, PFE, MRK, XOM, INTC, CSCO, MSFT, DELL, AMZN, KSU, LOW, HD, SBUX, MCD, NFLX
  •                 [email protected]


Welcome to Episode #257 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is going solo to discuss the lessons investors can take away from the list of the best performing S&P 500 stocks of the last 30 years: from 1990 to 2020.

Charlie Bilello, the CEO of Compound Capital Advisors, posted the list on his Twitter feed in early January 2021.

Given that the list covers the go-go 1990s, you might assume that it was dominated by technology companies which soared in that decade, including Cisco (CSCO – Free Report) and Microsoft (MSFT – Free Report) . They were two of the big performers of that decade.

While both appear on the list, Cisco at number 18 and Microsoft at number 24, neither is even in the top ten as the dot-com bust erased many gains made in the prior decade.

However, both still have amazing annualized 30-year gains. Cisco at 21.9% and Microsoft at 21.4%.

1990s Stars Still Shining Decades Later?

The top two stocks on the list had something in common outside of great performance: both went IPO during the 1990s.  

Monster Beverage (MNST – Free Report) is the best performing stock of those 30 years. It went public in August 1995 and had an annualized gain of 37% through 2020. That was a total return of 295,805%.

$10,000 invested at the IPO and held through 2020 was worth $29.59 million.

Number two on the list was the upstart online bookseller Amazon (AMZN – Free Report) , which went IPO in May 1997. It’s total return over the period was 217,028%, or 38.4% annualized even though shares dropped nearly 90% in the dot-com bust.

But some companies which saw great gains in the 1990s, didn’t make the list, and over the last 20 years have struggled.

One of those is General Electric (GE – Free Report) whose shares were up 731% in the 1990s, but have dropped 73% in the 2000 to 2020 period.

Lessons Learned from the List of Best Performers

1.       Holding for decades can work to build wealth. Compounding works, as long as you are in a winner.

2.       Diversification matters. Don’t place all your bets on one horse.

3.       What works one decade, may not work the next. Always re-visit your companies to make sure they are going in the direction that fits your expectations.

4.       You only need one winner.

What else do you need to know about being a successful long-term stock investor?

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of MSFT and AMZN in her personal portfolio, but, alas, has not owned them for 30 years.]

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