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Who said August wasn’t a good month for S&P 500 stocks? Investors just posted other big gains during the month.
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Powered by leaps in stocks as the leader in information technology Paycom software (PAYC) as well as discretionary consumer games like Penn National Gaming (PENN) and Etsy (ETSY), the S&P 500 soared for its seventh consecutive monthly gain in August, according to Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Gains in August are raising real money for investors.
If you had invested $ 10,000 in January and reinvested your money in the best stocks currently in the S&P 500 every month this year, including Paycom in August, you would now have $ 109,333, according to an Investor’s Business Daily analysis of the data. by S&P. Global Market Intelligence and MarketSmith.
This is a powerful gain of 993% over eight months thanks to the holding of eight shares. It even beats the impressive rise of the S&P 500 this year so far, which turned a $ 10,000 investment into $ 12,041. The S&P 500 rose 2.9% in August.
Yes it is true that you would earn more on some memes stocks. But that’s just the start of what turns out to be a 2021 banner for the S&P 500 so far. Investors have so far raked in $ 7.9 trillion this year in earnings on paper, according to Wilshire Associates.
Raising the S&P 500 in August
Surprised? August is known as a tough month for the S&P 500. But the S&P 500 actually climbed 2.9% in August 2021. This is the key index’s best monthly performance since March. And investors who stay invested benefit greatly.
The hindsight is 20/20. And it’s clear that few, if any, investors could have picked the best stocks in the S&P 500 each month because it’s not a repeatable strategy like this.
But this will show you how this S&P 500 breaks all the obstacles that stand in its way. And that goes even in August, a traditionally tough month for the S&P 500. Going back to 1950, the S&P 500 fell 0.2% on average in August, according to Stock Trader’s Almanac. This ranks August as the eleventh worst month of the year for the index.
Investors, however, have found plenty of reasons to buy S&P 500 shares in August 2021 anyway. About two-thirds of S&P 500 stocks rose in the month. And of those, about a tenth jumped 10% or more.
Take for example Paycom. The leading provider of HR tools for employees turned on the jets in the month, up more than 22%. This makes it the top performing S&P 500 stock during the month. Earlier this month, on August 3, Paycom posted earnings per share 56% higher at 97 cents in the June quarter. This exceeded expectations by more than 15%.
Paycom is just the latest of the S&P 500 big wins
Paycom’s big payoff is just the tip of a one-year $ 8 trillion rally.
The main actions of the S&P 500 each month of the year highlight the changing and shifting moods of the market. Even stocks and speculative games like Discovery (DISCA) took the lead in January, despite the S&P 500 falling 1.1% that month. But since then, it’s mostly straight.
Energy actions like Marathon Oil (MRO) jumped in February. And that then turned into a force in the stocks of materials like Nucor (NUE) and manufacturers like Equifax (EFX) in March and April. But lately, healthcare has taken over with actions like Biogen (BIIB) and Modern (MRNA) in June and July.
Now is the time for technology to charge higher again? In the meantime, you have $ 109,333 to hold back.
Current best S&P 500 stocks each month in 2021
Being in the right stock every month turned $ 10,000 into $ 109,333
| Month | Top S&P 500 Stocks | symbol | % of monthly share gain | Sector | S&P 500% monthly Ch. | Beg. Ball. | Cumulative value of a $ 10,000 investment in January reinvested in the best stocks each month | Composite assessment |
|---|---|---|---|---|---|---|---|---|
| January | Discovery | (INDEX) | 37.7% | Communication services | -1.1% | $ 10,000 | $ 13,770 | 30 |
| February | Marathon Oil | (MRO) | 53.3% | Energy | 2.6% | $ 13,770 | $ 21,109 | 65 |
| March | Nucor | (NUE) | 34.2% | Materials | 4.2% | $ 21,109 | $ 28,329 | 99 |
| April | Equifax | (EFF) | 26.6% | Industrial | 5.3% | $ 28,329 | $ 35,864 | 94 |
| May | NortonLifeLock | (NLOK) | 28.0% | Computer science | 0.5% | $ 35,864 | $ 45,906 | 83 |
| June | Biogenic | (BIIB) | 29.5% | Health care | 2.2% | $ 45,906 | $ 59,449 | 58 |
| July | Modern | (MRNA) | 50.5% | Health care | 2.3% | $ 59,449 | $ 89,470 | 84 |
| August | Paycom | (PAYC) | 22.2% | Computer science | 2.9% | $ 89,470 | $ 109,333 | 97 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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