March is usually a ho-hum month for S&P 500 stocks. But not this year.
Staying in the market in March paid off. Had you invested $10,000 in the top S&P 500 stock in the past three months — including industrial firm Nielsen Holdings (NLSN) in March — you'd have $28,188 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a sweet 181% gain in just two months.
Hindsight is 20/20. And clearly, few if any investors could have pulled this off as it's not a repeatable strategy. But the impressive gains are a reminder to investors making money is possible even in historically choppy periods of the year if you focus on leaders.
And it sure beats what you'd have just sitting on the S&P 500. That's saying something this March. The benchmark index rose 3.6% in March following a 3.1% decline in February. That helped to repair much of the damage from earlier this year. The S&P 500 is still down 4.9% this year so far. Your $10,000 invested in the S&P 500 would be worth just $9,510 now.
What's amazing is the S&P 500 rose despite piles of scary headlines on war in Europe, inflation, rising interest rates and an inverting yield curve foretelling a recession.
To own stocks now "you need to believe there is no next round to the Russia-Ukraine conflict and Q1 earnings season will deliver plenty of upside surprises," said Nicholas Colas of DataTrek Research. "We feel very good about the second issue. On the first, the tape is saying the conflict is largely over. We hope it is correct."
Fear Not March, This Year At Least
It's not usually so easy to find winners in the S&P 500 in March. But 2022 offered fertile ground.
The S&P 500's 5.4% gain this March is miles ahead of what's typical for the month. S&P 500 stocks, on average, rose 1.1% during the month of March going back to 1950, says "Stock Trader's Almanac." That ranks it exactly average, or sixth, out of all the months of the year for gains. Additionally, the month tends to be "rather turbulent," says the almanac.
But in March 2022, it was tougher to lose money than it was to make it. Impressively, more than 60% of S&P 500 stocks rose during the month. And of those, more than a quarter rose more than 10%. And all 11 S&P 500 sectors rose in the month. So, you had a good shot at making as much in a month as S&P 500 investors usually make in a whole year.
But some S&P 500 stocks pulled way ahead.
Finding The Big S&P 500 Winners In March
When it comes to massive wins in the month, the name of the game was Nielsen Holdings. If you owned shares of the audience measurement firm, you scored a fast 56% gain in March.
But this wasn't a story of booming fundamentals. In fact, analysts think the company's profit will only inch up 4% in 2022 to $1.89 a share. Rather, it's a buyout bonanza. Brookfield Business Partners announced plans to buy the company for $16.1 billion. That's well above the company's value of $9.6 billion, perhaps indicating other bidders might emerge.
March was also a month of S&P 500 stock bounce-backs. EPAM Systems, a leading company in the semiconductor industry, surged 43% in the month of March. It's the bounce many investors were positioning for, as the shares lost more than half their value this year.
Energy, too, continues to be a winning theme in spots. The Energy Select Sector SPDR ETF rose 8.3% in March. That only trails slightly the 9.6% gain by utilities as the top S&P 500 sector in March. Warren Buffett's new favorite energy stock is Occidental Petroleum. Shares are up more than 30% in March alone, parking them up more than 96% this year.
The question now is simple: Can the S&P 500 keep its mojo? The calendar is on stocks' side now. April historically is the best month of the year for stocks.
How To Turn $10,000 Into $27,972 In Three Months
Top S&P 500 in each month of the year
| 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 |
|---|---|---|---|---|---|---|---|
| January | Halliburton | 34.4% | Energy | -5.3% | $10,000 | $13,440 | |
| February | SolarEdge Technologies | 34.1% | Information Technology | -3.1% | $13,440 | $18,023 | |
| March | Nielsen Holdings | 56.4% | Industrials | 3.6% | $18,023 | $28,188 |
