Most people are losing money in this market. But you're not like most people if you found the right spots in the S&P 500.
April was rough for the S&P 500 for sure. Even so, had you invested $10,000 in the top S&P 500 stock in each of the past four months — including communication services company Twitter in April — you'd have $35,711 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a sweet 260% gain in just four 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 that 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 if you were just sitting on the S&P 500. That's saying something this April. The benchmark index sank nearly 6% in April to more than erase a 3.6% rise in March. That intensified the damage from earlier this year. The S&P 500 is still down 10.6% this year so far. Your $10,000 invested in the S&P 500 would be worth just $8,995 now.
Such losses are taking a toll on S&P 500 investors' confidence.
Sinking S&P 500 Shakes Up Investors
It's hard to be bullish when most S&P 500 stocks are falling. Some by quite a lot.
Less than 17% of investors polled in the weekly AAII sentiment survey said they're bullish, says Bespoke Investment Group. And two weeks ago the number of bulls was even lower, by 0.6 percentage points, marking the lowest level of bullishness since September 1992.
"This has grown into a historic stretch with such low optimism," Bespoke said. "In fact, this is only the second time in the history of the survey that bullish sentiment showed at least three consecutive weeks of sub-20% bullish sentiment readings."
But there are still plenty of places to make money.
Twitter Ruled The S&P 500 In April
There's nothing better for your stock than a billionaire like Elon Musk rushing ahead to buy it. And that's the windfall that Twitter investors found themselves with.
Shares of the short messaging online service jumped 26.9% just in the month of April to 49.11 a share. Musk's pending purchase of the company for $54.20 a share put the long-suffering stock into hyperdrive. It's now up more than 13.6% this year.
The buyout put Twitter into an orbit of its own during the month. No other S&P 500 stock's gains came anywhere near as close. The next best stock in the month was consumer staples firm Kimberly-Clark. The stock got a bump in April after the company reported a quarterly profit of $1.35 a share, topping expectations by nearly 10%. Shares of Kimberly-Clark jumped more than 15.2% in April alone. Another winning trend? Discount retail. Shares of Ross Stores jumped 14.2% as investors brace for consumers to downscale a bit.
April Shows S&P 500 Investors Keep Shifting
If it seems like you can't find a lasting trend in this market, you're not alone. Looking at the top S&P 500 stocks of each month tells the story of a volatile market.
Coming into the year, energy was the place to be. January's top stock with a 34.4% rise was Halliburton. And energy has been a strong sector for most of the year. However, in April, energy gave up some of its leadership position. Only one of the S&P 500's top stocks during the month was in energy: Valero Energy. It rose 13.8% as investors scramble for cheap stocks that pay big dividends. Valero yields 3.6%, or roughly double the S&P 500.
And then technology tried to recover in February with a 34.1% jump in shares of SolarEdge Technologies. And in some ways, Twitter is somewhat of a continuation of the tech theme.
But now all this is ancient history. All that matters is May, typically the month some investors like to sell and pack it up for the summer. If April is any guide, though, there should still be plenty of ways to make money if the market remains challenging.
How To Turn $10,000 Into $35,711 In Three Months
Top S&P 500 stock 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 | |
| April | 26.9% | Communication Services | -5.4 | 28,188 | 35,771 |
