Investors enjoyed a small S&P 500 rally in March. But there were much more lucrative places to put money in the month — including big-cap tech 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 Intel in March, you'd have $25,265 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive three-month gain of more than 150%. It's quite a feat given the S&P 500 is up only 5.5% so far this year — after being up more than that in January alone. The same $10,000 invested in the S&P 500 would be worth just $10,550 now. That's a gain of just $550. March also ushered in a sign of the big bounce in 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 three 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.
But it wasn't easy. March lived up to its reputation as a meh month for the S&P 500, says the "Stock Trader's Almanac." The S&P 500 gained just 2% in March 2023. That's slightly better than the 1.1% average gain in the month of March going back to 1950, says the Almanac. March is only the fifth best month of the in terms of returns historically.
Top S&P 500 Stock Of March: Intel
Intel, a long lagging former leader in computer chips, was the S&P 500 stock to own in March. Shares shot up 29% during the month to 32.08, while the S&P 500 inched up.
Analysts are writing off this year as another period of rebuilding. Adjusted profit is seen falling more than 70% to 53 cents a share in 2023. But after then, the hopes are pointing to a turnaround. Analysts think the company will make $1.87 a share in 2024, up more than 250% from 2023. And then in 2025, analysts see another 45% jump in adjusted profit per share coming.
But while analysts are bullish on the company's growth prospects, many think the company's stock run is overdue. Analysts rate Intel shares as a "hold." And they only think the shares will be worth 28.53 a share in 12 months, which would be more than 11% less than where they are now.
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.
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 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, a health care company, was a rare standout by gaining 25.6% during the month.
The big question, though, is whether big-cap technology will continue to outperform in April. The Nasdaq 100 rocketed more than 7.5% during just March. And the market tends to perform well in April, offering a bit of a tailwind. Historically, the month of April is the second-best month of the year for the S&P 500.
Investors would certainly applaud another month like March.
How To Turn $10,000 Into $25,265 In 3 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 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
