Who says August isn’t a good month for S&P 500 stocks? Investors just scored more big gains in the month.
Powered by jumps in stocks like information technology leader Paycom Software (PAYC) plus consumer discretionary plays like Penn National Gaming (PENN) and Etsy (ETSY), the S&P 500 blasted higher for its seventh-straight monthly gain in August, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Gains in August are stringing together real money for investors.
Had you invested $10,000 in January and reinvested your money into the top stock currently in the S&P 500 each month this year, including Paycom in August, you’d have an eye-popping $109,333 now, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That’s a powerful eight-month gain of 993% from holding eight stocks. That even beats the impressive rise in the S&P 500 this year so far, which turned a $10,000 investment into $12,073. The S&P 500 is up 3.2% in August.
Yes, it’s true you’d make more on some meme stocks. But it’s just the beginning of what’s turning out to be a banner 2021 for the S&P 500 so far. Investors hauled in $8 trillion this year so far in paper gains, says Wilshire Associates.
Driving The S&P 500 Higher In August
Surprised? August is known as a rough month for the S&P 500. But the S&P 500 actually rocketed 3.2% during the August of 2021. That’s the key index’ top monthly showing since March. And investors staying invested are profiting handsomely.
Hindsight is 20/20. And clearly, few if any investors could have pulled off picking the top S&P 500 stock each month as it’s not a repeatable strategy like this is.
But it goes to show you how this S&P 500 is smashing any obstacles that stand in its way. And that goes even in August, traditionally a tough month for the S&P 500. Going back to 1950, the S&P 500 slipped 0.2% in August on average, says Stock Trader’s Almanac. That ranks August as the eleventh-worst month of the year for the index.
Investors, though, found plenty of reasons to buy S&P 500 stocks in August 2021 anyway. Roughly two-thirds of the stocks in the S&P 500 rose during the month. And of those, roughly a tenth jumped by 10% or more.
Take for instance Paycom. The top-notch provider of HR tools to employees turned on the jets during the month, shooting up more than 22%. That makes it the top performing S&P 500 stock during the month. Early in the month, on Aug. 3, Paycom posted 56% higher profit per share of 97 cents in the June quarter. That topped expectations by more than 15%.
Paycom Is Just The Latest In String Of Big S&P 500 Gains
The big gain in Paycom is only the tip of an $8 trillion year-long rally.
Top S&P 500 stocks in each month of the year highlight the changing and shifting moods of the market. Meme stocks and speculative plays like Discovery (DISCA) took charge in January, despite the S&P 500 falling 1.1% in that month. But it’s been mostly straight up since then.
Energy stocks like Marathon Oil (MRO) jumped in February. And that then turned to strength in materials stocks like Nucor (NUE) and industrials like Equifax (EFX) in March and April. But lately, health care took over with stocks like Biogen (BIIB) and Moderna (MRNA) in June and July.
Is it now technology’s opportunity to charge higher again? In the meanwhile, you have $109,333 to hold you over.
Top Current S&P 500 Stocks Each Month In 2021
Being in the right stock each month turned $10,000 into $109,333
|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||Composite Rating|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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