Who says August isn’t a good month for S&P 500 stocks? Investors have simply made more big gains this month.
Powered by jumps in stocks as leader in information technology Paycom software (PAYC) plus consumer cyclically plays as Penn National Gaming (PENN) and Etsy (ETSY), the S&P 500 rocketed for its seventh consecutive monthly gain in August, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The gains in August are bringing real money together for investors.
If you invested $10,000 in January and put your money into the top stocks in the S&P 500 every month this year, including Paycom in August, you’d now have a dazzling $109,333, says an Investor’s Business Daily analysis of data from S&P. Global market information and MarketSmith.
That’s a strong eight-month gain of 993% from holding eight stocks. That’s even better than the S&P 500’s impressive gains so far this year, which turned a $10,000 investment into $12,073. The S&P 500 is up 3.2% in August.
Yes, it is true that you would earn more from some meme stocks. But it’s just the beginning of what so far turns out to be a 2021 banner for the S&P 500. Investors have cashed in on $8 trillion in paper gains so far this year, Wilshire Associates says.
Pushing the S&P 500 up in August
Surprised? August is known to be a rough month for the S&P 500. But the S&P 500 even shot up 3.2% in August 2021. That is the main monthly index of the main index since March. And investors who stay invested will benefit greatly.
In hindsight is 20/20. And it’s clear that few, if any, investors would have managed to pick the best S&P 500 stocks each month because it’s not a repeatable strategy like this one.
But it shows you how this S&P 500 destroys all the obstacles that stand in its way. And that’s true even in August, traditionally a tough month for the S&P 500. Going back to 1950, the S&P 500 fell 0.2% on average in August, says Stock Trader’s Almanac. That ranks August as the 11th worst month of the year for the index.
Either way, investors found plenty of reasons to buy S&P 500 stocks in August 2021. About two-thirds of shares in the S&P 500 rose during the month. And about a tenth of that increased by 10% or more.
Take Paycom for example. The premier provider of HR tools to employees turned on its jets over the month, skyrocketing more than 22%. That makes it the best-performing S&P 500 stock during the month. At the beginning of the month, on August 3, Paycom posted a 56% increase in earnings per share of 97 cents in the June quarter. That exceeded expectations by more than 15%.
Paycom is just the latest batch of big S&P 500 gains
The big gain in Paycom is just the tip of an $8 trillion year 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 (DISC) took the lead in January, despite the S&P 500 falling 1.1% that month. But since then, it has largely gone straight.
Energy stocks such as Marathon oil (MRO) jumped in February. And that then turned into strength in material supplies such as: Nucor (naked) and industrialists such as Equifax (EFX) in March and April. But lately, healthcare has taken over with stocks like biogen (BIIB) and Modern (MRNA) in June and July.
Is it now the technology’s chance to charge higher again? In the meantime, you have $109,333 to spare.
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 Stocks||Symbol||Stock monthly % profit||Sector||S&P 500 % Monthly Ch.||begging. ball.||Cumulative value of $10,000 investment in January reinvested in top stocks every month||Composite Review|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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