Think you must only own Nvidia to make big money on the S&P 500 this year? Not so.
If you invested $10,000 in January in the top-performing stock in the S&P 500 and reinvested that in each month's top performer, including Constellation Energy, a power utility firm in Baltimore, in February, you'd have $17,214 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive two-month gain of 72%. It's quite a feat given the S&P itself is up an impressive 6.9% so far this year. The same $10,000 invested in the S&P 500 would be worth just $10,690 now. That's a gain of just $690. The S&P 500 gained 5.1% in February, topping its 1.6% rise in January.
Will The S&P Keep Rolling In March 2024?
Hindsight is 20-20. And, clearly, few if any investors could have picked the top stock in each of the past two months, as it's not a repeatable strategy. But the staggering numbers this year remind investors amazing gains can be scooped up by diligent investors who keep buy lists handy for when the S&P 500 starts to rally.
In fact, following two months of big gains, the S&P offered many ways to make money. The S&P 500 itself rose 5.1% in February. And more than 67% of the stocks in the S&P 500 rose during February. And of those, 10 stocks jumped more than 20% in just one month.
Top S&P 500 Stock Of February: Constellation Energy
The S&P itself was so strong in February that competition to be No. 1 was tough. But better-than-expected business results from Constellation announced in November give investors confidence about future growth. Investors were still celebrating the company's third-quarter profit that ended up more than 19% better than expected when Constellation jumped 40% in February.
Now analysts think the company's profit will rise more than 36% this year.
The rest of the top 10 S&P 500 stocks in the second month of the year were a motley crew. A total of two health care stocks finished in the top. And Ralph Lauren was second-best stock with a more than 29% monthly gain in February.
What's Coming Next For The S&P 500?
The big question, though, is: Will the S&P 500's winning streak continue in March 2024? Historically, the odds look decent.
March is the fifth-best month for the S&P going back to 1950, says the "Stock Trader's Almanac." The S&P 500 rises 0.4% in March on average. And it rose nearly 66% of the time. Keep in mind, though, March sell-offs are common late in the month in recent history.
But following a January and February like we just enjoyed, a little selling wouldn't be all that surprising.
How To Turn $10,000 Into $17,214 In 2 Months
| 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 best stock each month |
|---|---|---|---|---|---|---|---|
| January | Nvidia | 24.2% | Information Technology | 1.6% | $10,000 | $12,420 | |
| February | Constellation Energy | 38.6% | Utilities | 5.1% | $12,420 | $17,214 |
