Making money in the S&P 500 got even tougher in August. But not impossible.
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In total, did you invest $10,000 in January and reinvest your money in the #1 stock currently in the S&P 500 each month this year, including Constellation Energy (CEG) in August, you would now have $95,509, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That’s an impressive gain of over 830% over eight months. That’s quite a feat in a year, the S&P 500 is down more than 16% and has been brushing a bear market all year. The same $10,000 invested in the S&P 500 is only worth $8,400 now. That’s a loss of $2,600.
While these eight stocks jumped the most, the S&P 500 struggled during the month. The S&P 500 fell 3.5% in August. This wipes out the index’s 9.1% gain in July. It also prolongs the pain of many index investors. And to date, the S&P 500 has fallen in six of the past eight months.
The Biggest S&P 500 Gainers of the Year
Looking at August’s top stocks tells you that S&P 500 investors are trying to find stability. This is a recurring theme throughout the month.
Constellation Energy, an East Coast power producer, is the No. 1 stock of the month up more than 23%. The company reports 0.7% on top of that. It also shows how the S&P 500 the mood changed in august.
The performance is not impressive. But the stability of the company is what seems to be most important to investors now. Analysts believe the company’s earnings will reach more than $1 billion, or $2.98 per share, this fiscal year. If they’re right, that marks a reversal from the $1.24 per share the company lost in 2021. Most impressively, however, Constellation’s adjusted earnings per share are expected to rise not just this year, but also in 2023, 2024, 2025, and 2026. That’s a long streak of growth at a time when growth is scarcer.
Other S&P 500 winners in August, including Cardinal Health and Nielsen Holdings, are also tied to the theme of stability.. Both stocks rose north of 15% in the month as investors applauded strong corporate earnings records. Just like with Constellation, analysts believe Nielsen’s earnings per share will grow every year until at least 2027. And it’s earning 2.8% a year to boot.
Seeing the rush to safety is a good step after the rise of more speculative play in July. Even with EPAM, the #1 stock in August, activity is more focused on long-term contracts and stable growth than rapid growth. Information technology stocks rose more than 22% during the month.
With the S&P 500 so uncertain, investors seem to be looking more for a safe bet.
How to turn $10,000 into $95,509 in eight months
The best S&P 500 stocks for each month of the year so far
| Month | Top S&P 500 Stocks | Symbol | Monthly stock % gain | Sector | S&P 500% ea. monthly. | Bag. ball. | Cumulative value of $10,000 invested in January reinvested in top stocks each month |
|---|---|---|---|---|---|---|---|
| January | Halliburton | (HAL) | 34.4% | Energy | -5.3% | $10,000 | $13,440 |
| February | SolarEdge | (SEDG) | 34.1% | Computer science | -3.1% | $13,440 | $18,023 |
| March | Nielsen Holdings | (NLSN) | 56.4% | Industrial | 3.6% | $18,023 | $28,188 |
| April | (TWTR) | 26.9% | Communication Services | -5.4% | $28,188 | $35,771 | |
| May | Albemarle | (ALB) | 33.4% | Materials | -5.3% | $35,771 | $47,718 |
| June | General dollar | (CEO) | 11.4% | Consumer Discretionary | -8.4% | $47,718 | $53,158 |
| July | Enphase Energy | (ENPH) | 45.6% | Computer science | 9.1% | $53,158 | $77,398 |
| August | Constellation Energy | (CEG) | 23.4% | Utilities | -3.5% | $77,398 | $95,509 |