April turned out to be great month for most S&P 500 investors. But it was stupendous for those who picked the best stocks.
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 2023, including Meta Platforms in April, you'd have $50,000 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive four-month gain of more than 396%. It's quite a feat given the S&P 500 is up 8.4% so far this year. The same $10,000 invested in the S&P 500 would be worth just $10,840 now. That's a gain of just $840. April also continued a big bounce in massive tech stocks.
Did March Reinvigorate The S&P 500?
Hindsight is 20-20. And clearly, few if any investors could have picked out the top stock in each of the past four months, as it's not a repeatable strategy. But the staggering numbers are a reminder to investors that gains can be found in a choppy market.
There's no doubt, though, April's big gains contributed. April lived up to its reputation as a great month for the S&P 500, says the "Stock Trader's Almanac." The S&P 500 gained 8.3% in April 2023. That's much better than the 1.5% average gain in the month of April going back to 1950, says the Almanac. March is the second best month of the in terms of returns historically.
Top S&P 500 Stock Of April: Meta Platforms
Talk about a sleeper stock in April. Meta Platforms surged more than 97% during the month as investors applauded the company's first-quarter results.
Meta, the company behind Facebook, reported adjusted quarterly profit of 2.54 a share. That was nearly 7% lower than what the company earned a year ago. But the company's aggressive cost cutting allowed profit to exceed forecasts by more than 30%.
Facebook's comeback is noteworthy, too, as it fits in the theme that's working so well for S&P 500 investors now: The surge in large technology stocks. Just six giant tech stocks, all of which are also in the Nasdaq 100, are driving 80% of the S&P 500's gains this year.
Reading The S&P 500 This Year
Each month's twists and turns reveal just how challenging the S&P 500 is making things for investors, including Cathie Wood.
The year kicked off with a bang. Not only did the S&P 500 jump 6.2% in just January, some winners during the month soared even more. Warner Bros. Discovery (WBD) added more than 56% in just a single month.
And then came February with a pullback. Optimism that the Fed finally cooled inflation with its rate hikes is giving way to fear that more rate increases are to come. Three quarters of the stocks in the S&P 500 dropped in February. Catalent (CTLT), a health care company, was a rare standout by gaining 25.6% during the month.
The big question, though, is whether big-cap technology stocks will continue to outperform in May. The Nasdaq 100 rocketed more than 20% during just April. And the market tends to not do as well in May, offering a bit of a tailwind. Historically, the month of May is the fifth-worst month of the year for the S&P 500.
How To Turn $10,000 Into $49,621 In 4 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 | Warner Bros. Discovery | 56.3% | Communication Services | 6.2% | $10,000 | $15,630 | |
| February | Catalent | 25.6% | Health Care | -2.3% | $15,630 | $19,631 | |
| March | Intel | 28.7% | Information Technology | 2.0% | $19,631 | $25,265 | |
| April | Meta Platforms | 97.9% | Communication Services | 8.3% | $25,265 | $50,000 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
