July wasn't all that bad. Yes, the S&P 500 fell 0.4% during the month— but there were still ample stocks to make money on. They just weren't in the same obvious places.
If you invested $10,000 in January in the top-performing stock in the S&P 500 at the time and reinvested that in each month's top performer, including (a carpet maker of all things) Mohawk Industries in July, you'd have $72,300 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
That's an impressive six-month gain of 623%. It's quite a feat given the S&P 500 itself is up a solid 15% so far this year. The same $10,000 invested in the S&P 500, though, would be worth just $11,450 now. That's a gain of just $1,450. The S&P 500 shed 0.4% in July, knocking it down for the first month this year since April.
Will The S&P 500 Get New Leaders In August 2024?
Hindsight is 20-20. And, clearly, few if any investors could have picked the top stock in each of the past seven months, as it's not a repeatable strategy.
But the staggering gains on S&P 500 stocks this year remind investors amazing gains can be scooped up by diligent investors who stay engaged in the market.
In fact, even in a month the index fell, the S&P 500 offered many ways to make even more money. More than 70% of the stocks in the S&P 500 gained during July. And of those, 14 stocks jumped more than 20% in just one month.
Top S&P 500 Stock Of July: Mohawk Industries
The S&P 500 itself wasn't great in July. Many of the huge AI stocks that drove the market all year faded in July. But you could have still done rather well.
Mohawk Industries, a maker of building materials, saw its shares jump 43% in the month. And the stock's stunning gain comes ahead of what analysts think will be a solid year for profit. Analysts think the company will make $9.99 a share in 2024, up nearly 9% from 2023.
But there's an even stronger force pushing Mohawk. Many investors expect the Federal Reserve to cut short-term interests rates at some point this year. If that happens, it could spark demand for real estate.
Reading The S&P 500 So Far This Year
Monthly S&P 500 winners show how investors ducked and weaved all year.
The AI rally dominated in January. And of course, AI king Nvidia ruled with a 24.2% monthly rise. February the whole S&P 500 jumped 5.2%, its best monthly gain this year so far. And that month the AI-fueling utility Constellation Energy won with a 38.6% rise.
And then in March, the semiconductors lit it up. Micron Technology jumped 30.1%. And then investors pulled back in April due to worries about inflation. The S&P 500 dropped 2.6% in April, while gold miner Newmont took off 17.9%.
And then in May, solar-power player First Solar rallied. It's a reflection of investors' appreciation that alternative energy will likely play a larger role in keeping power-hungry AI models running. And then June came the Caesars Entertainment rally.
What's Coming Next For The S&P 500?
The big question, though, is: Will the S&P 500's lackluster July bleed into August 2024? Historically, investors famously like to sell in May and go away until November.
And August is usually pretty lackluster for stocks. It's the third worst month for the S&P 500 going back to 1950, says the "Stock Trader's Almanac." The S&P 500 rises 0.01% in August on average. And it fell about 40% of the time.
Keep in mind, though, there's no guarantee stocks will keep surging like they have most of the year. Investors, too, might decide they're looking for more than just AI.
How To Turn $10,000 Into $72,300 In 7 Months
| Month | Top S&P 500 stock | Symbol | Monthly gain | Sector | S&P 500 monthly ch. | Starting balance | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|---|
| January | Nvidia | NVDA | 24.2% | Information Technology | 1.6% | $10,000 | $12,420 |
| February | Constellation Energy | CEG | 38.6% | Utilities | 5.2% | $12,420 | $17,214 |
| March | Micron Technology | MU | 30.1% | Information Technology | 3.1% | $17,214 | $22,397 |
| April | Newmont | NEM | 17.9% | Materials | -2.6% | $22,397 | $26,406 |
| May | First Solar | FSLR | 53.1% | Information Technology | 2.3% | $26,406 | $40,427 |
| June | Caesars Entertainment | CZR | 24.8% | Consumer Discretionary | 4.3% | $40,427 | $50,453 |
| July | Mohawk Industries | MHK | 43.3% | Consumer Discretionary | -0.4% | $50,453 | $72,300 |
