The S&P 500 handed investors a loss of nearly 20% in 2022. But even during such a disappointing year, plenty of moneymaking stocks in the index jumped higher.
All told, had you invested $10,000 in January and reinvested your money into the top-performing stock currently in the S&P 500 each month in 2022, including Organon in December, you'd have $277,126 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive 12-month gain of more than 2,671%. It's quite a feat in a year the S&P 500 is down more than 19% and has been brushing with a bear market all year. The same $10,000 invested in the S&P 500 would be worth just $8,080 now. That's a loss of $1,920.
Did December Awaken 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 12 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.
But it wasn't easy. December failed to live up to its reputation as a good month for the S&P 500. By losing 5.7% during the month, that's much worse than the S&P 500's 1.5% average gain in December going back to 1950, says "Stock Trader's Almanac."
December 2022 wound up the third worst month of the year, besting only the 9.3% loss in September and 8.4% decline in June.
Top Stock Of December: Organon
Organon, a developer of therapies for fertility and cancer, was the S&P 500 stock to own in December. Shares gained 8.3%. That might not sound impressive for a monthly gain. And you're right if you're comparing it to other top S&P 500 stocks in other months in 2022.
The 8.3% rise of Organon is the lowest gain of any of the top S&P 500 in each month of the year. Just to put it into perspective, Dexcom — the top S&P 500 stock in October — jumped more than 51% that month.
But in a month like December 2022, investors would be thrilled with a 8.5% gain. The average S&P 500 stock is down 4.7% during the month.
Reading The S&P 500 This Year
Each month's twists and turns reveal just how difficult S&P 500 this is for investors.
The year 2022 kicked off with inflation fears and turned energy firm 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. Energy is the only sector out of the 11 in the S&P 500 that's up in 2022.
But alternative energy, too, is a bright spot. Hopes for government stimulus for more alternative-energy plays fanned SolarEdge into February's top stock. And in July solar play Enphase Energy was the top stock, followed by First Solar in August.
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 was tops with its 45.6% rise. But that rally ended quickly, followed by a 3.5% drop in August. Since then, investors have been playing it safer with health care stocks grabbing attention. A health care stock topped the S&P 500 in three of the last four months of the year.
Here's to hoping January can undo some of December's damage. January is traditionally the fifth-best month of the year, says "Stock Trader's Almanac."
One thing's for sure, though: Investors will happily say goodbye to 2022.
How To Turn $10,000 Into $277,637 In 12 Months
| Month | Top S&P 500 stock | Symbol | Stock monthly % gain | Sector | S&P 500 % monthly ch. | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|
| January | Halliburton | 34.4% | Energy | -5.3% | $13,440 | |
| February | SolarEdge | 34.1% | Information Technology | -3.1% | $18,023 | |
| March | EQT | 48.7% | Energy | 3.6% | $26,800 | |
| April | EQT | 18.0% | Energy | -5.4% | $31,624 | |
| May | Albemarle | 33.4% | Materials | -3.6% | $42,187 | |
| June | Dollar General | 11.4% | Consumer Discretionary | -8.4% | $46,996 | |
| July | Enphase Energy | 45.6% | Information Technology | 9.1% | $68,426 | |
| August | First Solar | 28.6% | Information Technology | -4.2% | $87,996 | |
| September | Biogen | 36.6% | Health Care | -9.3% | $120,203 | |
| October | Dexcom | 51.3% | Health Care | 8.0% | $181,867 | |
| November | Etsy | 40.7% | Consumer Discretionary | 5.40% | $255,887 | |
| December | Organon | 8.3% | Health Care | -5.70% | $277,126 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
